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United States Government Accountability Office: 
GAO:  

Report to Congressional Committees:  

July 2013:  

Securities and Exchange Commission:  

Improving Personnel Management Is Critical for Agency's Effectiveness:  

GAO-13-621:  

GAO Highlights:  

Highlights of GAO-13-621, a report to congressional committees.  

Why GAO Did This Study:  

Personnel management is important to the mission of federal agencies. 
Several high-profile enforcement failures have raised concerns about 
SEC’s personnel management. Section 962 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act mandates GAO to report on SEC's 
personnel management. This report examines (1) SEC’s organizational 
culture and (2) its personnel management challenges and efforts to 
address these challenges.  

GAO assessed SEC’s personnel management systems against OPM guidance 
and other criteria related to workforce planning and performance 
management (which includes appraisals and feedback); reviewed relevant 
reports; surveyed SEC employees and senior management (with 78 and 74 
percent response rates, respectively) to gather their views on SEC’s 
organizational culture and personnel management practices; and spoke 
with former employees, the SEC Inspector General, representatives of 
the employees’ union, financial industry associations, consulting 
firms, and academics.  

What GAO Found:  

Based on analysis of views from Securities and Exchange Commission 
(SEC) employees and previous studies from GAO, SEC, and third parties, 
GAO determined that SEC’s organizational culture is not constructive 
and could hinder its ability to effectively fulfill its mission. 
Organizations with constructive cultures are more effective and 
employees also exhibit a stronger commitment to mission focus. In 
describing SEC’s culture, many current and former SEC employees cited 
low morale, distrust of management, and the compartmentalized, 
hierarchical, and risk-averse nature of the organization. According to 
an Office of Personnel Management (OPM) survey of federal employees, 
SEC currently ranks 19th of 22 similarly sized federal agencies based 
on employee satisfaction and commitment. GAO’s past work on managing 
for results indicates that an effective personnel management system 
will be critical for transforming SEC’s organizational culture. 
SEC has not consistently or fully implemented effective personnel 
management. SEC has taken some steps, but most of its efforts were in 
the early stages and could be enhanced. GAO identified four key areas 
where continued improvement is needed:  

* Workforce planning. SEC has not yet developed a comprehensive 
workforce plan, including how it identifies its future leaders. 
Although SEC has taken some steps, such as identifying competency gaps 
and conducting leadership training, these efforts do not reflect all 
elements of effective workforce planning outlined in OPM guidance. OPM 
guidance calls on agencies to develop and implement plans to identify 
workforce needs and develop future leaders. Without fully implementing 
such practices, SEC will not be able to make well-informed decisions 
on how to best meet current and future agency needs.   

* Performance management. SEC’s implementation of its performance 
management system could be improved. SEC staff expressed many concerns 
about the system, such as an unclear link between their performance 
and ratings. SEC provided training to supervisors on how to use the 
system and obtained staff input on aspects of the system. However, SEC 
has not fully validated the system with its staff. Also, SEC does not 
have mechanisms in place to monitor supervisors’ use of the system. By 
not validating all aspects of the system and establishing mechanisms 
to hold supervisors accountable for appropriately using it, SEC is 
missing opportunities to enhance the credibility and effectiveness of 
its performance management system.  

* Communication and collaboration. SEC has made efforts to improve 
communication and collaboration (such as creating new subunits to 
facilitate joint work), but has not yet fully addressed barriers. 
Moreover, these efforts have not yet addressed all of the problems 
that the Inspector General found contributed to past enforcement 
failures. GAO has reported on leading practices that SEC could 
explore, including sustained management attention. Improving 
communication and collaboration within SEC is critical to its 
effectiveness.     

* Personnel management assessment. SEC has not implemented an 
accountability system to monitor and evaluate its personnel 
management. According to OPM guidance, such a system helps agencies 
assess whether personnel policies are effective. SEC officials 
explained that efforts were under way to develop a system. Until such 
an accountability system is implemented, it will be difficult for SEC 
to make necessary improvements and help ensure that its personnel 
management policies and programs align with its mission.  

What GAO Recommends:  

GAO makes seven recommendations to improve SEC’s personnel management, 
including developing comprehensive workforce plans, implementing 
mechanisms to monitor how supervisors use the performance management 
system, conducting periodic validations of the system, exploring 
collaboration practices of leading organizations, and regularly 
assessing these efforts. SEC agreed with GAO’s recommendations.  

View [hyperlink, http://www.gao.gov/products/GAO-13-621]. For more 
information, contact A. Nicole Clowers at (202) 512-8678 or 
clowersa@gao.gov.  

[End of section]  

Contents:  

Letter:  

Background:  

SEC's Organizational Culture Hinders Agency's Ability to Effectively 
Fulfill Its Mission:  

Improving Personnel Management Is Critical for SEC's Effectiveness:  

Conclusions:  

Recommendations for Executive Action:  

Agency Comments:  

Appendix I: Objectives, Scope, and Methodology:  

Appendix II: GAO Survey on SEC Personnel and Human Capital Management: 
Survey Introduction: 
Survey Results of Nonsupervisors and Supervisors: 
Survey Results of Senior Officers:  

Appendix III: Ratio of Staff to Supervisors and Senior Officers, 
Fiscal Years 2008-2012:  

Appendix IV: Percentage of Staff Who Left SEC, Fiscal Years 2008-2012:  

Appendix V: Comments from the Securities and Exchange Commission:  

Appendix VI: GAO Contact and Staff Acknowledgments:  

Tables:  

Table 1: Roles and Responsibilities of Selected SEC Divisions, as of 
April, 2013:  

Table 2: Survey Responses from SEC Employees about Morale, as of 
January-March 2013:  

Table 3: Survey Responses from SEC Employees about Trust, as of 
January-March 2013:  

Table 4: Survey Responses from SEC Employees about Having a Voice in 
Decision Making, as of January-March 2013:  

Table 5: Survey Responses from SEC Employees about Risk Aversion, as 
of January-March 2013:  

Table 6: Survey Responses from SEC Employees about Taking a Stand on 
Issues, as of January-March 2013:  

Table 7: Survey Responses from SEC Employees about Promotion to 
Management, as of January-March 2013:  

Table 8: Survey Responses from SEC Employees about Incentives for 
Promotion, as of January-March 2013:  

Table 9: Survey Responses from SEC Employees about Fairness and 
Appropriateness of Performance Appraisals, as of January-March 2013:  

Table 10: Survey Responses from SEC Employees about Performance and 
Recognition, as of January-March 2013:  

Table 11: Survey Responses from SEC Employees about Feedback from 
Direct Supervisors, as of January-March 2013:  

Table 12: Survey Responses from SEC Employees about How Senior 
Officers Dealt with Poorly Performing Supervisors, as of January-March 
2013:  

Table 13: Survey Responses from SEC Employees about How Supervisors 
Dealt with Poorly Performing Staff, as of January-March 2013:  

Table 14: Survey Responses from SEC Employees about Flow of Relevant 
Information, as of January-March 2013:  

Table 15: Survey Responses from SEC Employees about Open Communication 
between Staff and Management, as of January-March 2013:  

Table 16: Ratio of Supervisors to Nonsupervisors (per every 100 
nonsupervisory staff), Fiscal Years 2008-2012:  

Table 17: Ratio of Senior Officers to Nonsupervisors (per every 100 
nonsupervisory staff), Fiscal Years 2008-2012:  

Table 18: Ratio of Senior Officers to Supervisors (per Every 100 
Supervisory Staff), Fiscal Years 2008-2012:  

Table 19: Headquarters Staff Who Left SEC, Fiscal Years 2008-2012:  

Table 20: Staff Who Left SEC from 11 Regional Offices, Fiscal Years 
2008-2012:  

Table 21: All Staff Who Left SEC, Fiscal Years 2008-2012:  

Figure:  

Figure 1: Organizational Structure of SEC, as of September, 2012:  

Abbreviations:  

COO: Office of the Chief Operating Officer:  

DERA: Division of Economic and Risk Analysis:  

FAA: Federal Aviation Administration:  

HCAAF: Human Capital Assessment and Accountability Framework:  

IG: Inspector General:  

NEP: National Examination Program:  

OCIE: Office of Compliance Inspections and Examinations:  

OHR: Office of Human Resources:  

OPM: Office of Personnel Management:  

SEC: Securities and Exchange Commission:  

[End of section]  

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548:  

July 18, 2013:  

The Honorable Tim Johnson: 
Chairman: 
The Honorable Michael Crapo: 
Ranking Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate:  

The Honorable Jeb Hensarling: 
Chairman: 
The Honorable Maxine Waters: 
Ranking Member: 
Committee on Financial Services: 
House of Representatives:  

The Securities and Exchange Commission's (SEC) mission is to protect 
investors; maintain fair, orderly, and efficient securities markets; 
and facilitate capital formation. To carry out its mission, SEC 
requires public companies to disclose meaningful financial and other 
information to the public, examines firms it regulates, and 
investigates potential securities law violations. Over the past 
decade, the markets, products, and participants that SEC oversees and 
regulates--including investment advisers, mutual and exchange-traded 
funds, and broker-dealers--have grown in size and complexity. Trading 
volume in the equity markets has more than doubled, as have assets 
under management by investment advisers. 

As the markets grew in size and complexity over the past two decades, 
investors experienced large losses during the 2007-2009 financial 
crisis and through a few high-profile fraud cases, such as the failure 
of Bernard L. Madoff Investment Securities LLC. The financial crisis 
highlighted the interconnectedness and complexity of the growing 
financial markets as securitized assets amplified losses across 
multiple markets. The crisis also highlighted gaps and weaknesses in 
the supervision and regulation of financial markets. To address such 
concerns, Congress enacted the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (the Dodd-Frank Act).[Footnote 1] Among other 
things, the act expands SEC's regulatory responsibilities, including 
increased oversight of hedge funds and derivatives. However, members 
of Congress and other stakeholders have questioned SEC's ability to 
effectively protect investors in light of the growing complexity of 
the markets and past enforcement failures. 

Effectively carrying out existing and new regulatory responsibilities 
requires that SEC attract and retain a high-quality workforce. 
However, we and others previously reported on the personnel management 
challenges SEC has faced in building and retaining such a workforce. 
[Footnote 2] These challenges included a lack of emphasis on personnel 
management and weaknesses in linking pay and performance. SEC is not 
unique in facing personnel management challenges. In 2001, we added 
strategic human capital management to our list of high-risk areas 
because of the long-standing lack of leadership on personnel matters 
across the government.[Footnote 3] 

Section 962 of the Dodd-Frank Act mandates us to examine SEC's 
personnel management, including the competence of professional staff, 
the effectiveness of supervisors, and issues related to employee 
performance assessments, promotion, and intra-agency communication. 
[Footnote 4] This report examines (1) what is known about SEC's 
organizational culture and (2) SEC's personnel management challenges 
and its efforts to address these challenges.[Footnote 5] 

To document SEC's organizational culture and personnel management 
challenges, we reviewed management consultant reports, GAO reports, 
and SEC reports and testimonies. We also interviewed former SEC 
officials, the SEC Inspector General (IG), SEC union representatives 
and members, management consultants, representatives from industry 
trade groups, and academics with knowledge of SEC personnel management 
issues. We examined SEC's performance management policies, procedures, 
and activities by reviewing agency documents related to workforce and 
succession planning (such as recruitment and training practices), 
performance appraisals, supervision, promotion processes, and 
communication within and among divisions. We assessed the policies, 
procedures, and activities against applicable federal regulations, the 
Office of Personnel Management's (OPM) Human Capital Assessment and 
Accountability Framework (HCAAF), key human capital practices and GAO 
standards for internal control, and SEC's strategic plan.[Footnote 6] 

We also conducted semistructured one-on-one interviews, focus groups, 
and two web-based surveys to gather employee views on SEC's 
organizational culture and the agency's personnel management 
practices, including areas where SEC has been doing well and areas in 
which there are challenges. The scope of these efforts included 
employees in the five divisions and one office (hereinafter, 
divisions) in SEC primarily responsible for implementing the agency's 
mission--Divisions of Corporation Finance; Enforcement; Investment 
Management; Economic and Risk Analysis; Trading and Markets; and the 
Office of Compliance Inspections and Examinations (OCIE).[Footnote 7] 
In these divisions, we focused on employees in four occupational 
categories--accountants, attorneys, examiners, and financial analysts--
that account for the majority of SEC employees. We held one-on-one 
interviews with 129 nonsupervisory staff, supervisors, and senior 
officers at SEC headquarters and regional offices from July to 
September 2012.[Footnote 8] All employees in the relevant divisions 
and occupational categories were invited to participate in the 
interviews. We held 22 focus groups at headquarters and four regional 
offices with nonsupervisory staff and supervisors in the divisions and 
occupational categories within our scope. We selected the regional 
offices based on factors including enforcement activity, geographic 
location, and staff size, and randomly selected staff and supervisors 
from the relevant divisions for our focus groups. We also implemented 
two web-based surveys of all 2,439 employees (nonsupervisory staff and 
supervisory) and 86 senior officers in these divisions that fall 
within the four occupation groups.[Footnote 9] The survey response 
rates were 78 and 74 percent, respectively. We do not make any attempt 
to extrapolate the findings to the 22 percent of eligible staff who 
chose not to complete our survey. We reviewed OPM's 2012 Federal 
Employee Viewpoint Survey Results to obtain additional perspectives 
from SEC staff on the agency's personnel management-related issues. 
[Footnote 10] Appendix I includes more information on our scope and 
methodology. 

We conducted this performance audit from March 2012 to July 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient and appropriate evidence to provide a reasonable basis for 
our findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background:  

SEC is composed of a five-member Commission that oversees SEC 
operations and provides final approval over staff interpretation of 
federal securities laws, proposals for new or amended rules to govern 
securities markets, and enforcement activities. The Commission, which 
is headed by the SEC chairman, oversees 5 divisions and 23 offices, 
including 11 regional offices. Figure 1 further depicts SEC's 
organizational structure. 

Figure 1: Organizational Structure of SEC, as of September, 2012:  

[Refer to PDF for image: organizational chart]  

Top level: 
Chairman; Office of the Chairman: 
Commissioners (4).  

Second level, reporting to Office of the Chairman: 
Division of Enforcement[A]; 
Division of Corporation Finance[A]; 
Division of Investment Management[A]; 
Division of Economic and Risk Analysis[A][B]; 
Division of Trading and Markets[A]; 
Office of Administrative Law Judges; 
Office of Chief Accountant; 
Office of Chief Operating Officer; 
Office of Credit Ratings; 
Office of Equal Employment Opportunity; 
Office of Ethics Counsel; 
Office of Compliance Inspections and Examinations[A]; 
Office of General Counsel; 
Office of Inspector General; 
Office of Internal Affairs; 
Office of Investor Advocate; 
Office of Investor Education and Advocacy; 
Office of Legislative and Inter-Governmental Affairs; 
Office of Minority and Women Inclusion; 
Office of Municipal Securities; 
Office of Public Affairs; 
Office of the Secretary.  

Third level, reporting to the Chief Operating Officer: 
Office of Acquisitions; 
Office of Financial Management; 
Office of Human Resources; 
Office of Information Technology; 
Office of Support Operations.  

Fourth level, reporting to Division of Enforcement and Office of 
Compliance Inspections and Examinations: 
Regional Offices: 
Atlanta; 
Boston; 
Chicago; 
Denver; 
Fort Worth; 
Los Angeles; 
Miami; 
New York; 
Philadelphia; 
Salt Lake; 
San Francisco.  

Source: SEC.  

[A] Division. Office in GAO study.  

[B] On June 6, 2013, SEC renamed the Division of Risk, Strategy, and 
Financial Innovation to the Division of Economic and Risk Analysis.  

[End of figure]  

SEC's divisions are organized by functional responsibility. For 
example, SEC's responsibilities for reviewing corporate disclosures 
are housed within the Division of Corporation Finance. Table 1 
summarizes the roles and responsibilities of the six divisions that 
primarily implement SEC's mission. These divisions are supported by 
other offices, such as the Office of Financial Management and the 
Office of Human Resources (OHR). In particular, OHR provides overall 
responsibility for the strategic management of SEC's personnel 
management and assesses compliance with federal regulations for areas 
such as recruitment, retention, leadership and staff development, and 
performance management. OHR reports to SEC's Office of the Chief 
Operating Officer (COO), which in turn reports to the Commission. 

Table 1: Roles and Responsibilities of Selected SEC Divisions, as of 
April 2013:  

Division: Division of Corporation Finance; 
Roles and responsibilities: Reviews corporate disclosures, assists 
companies in interpreting SEC's rules, and recommends new rules for 
adoption.  

Division: Division of Enforcement; 
Roles and responsibilities: Investigates possible violations of 
securities laws, recommends Commission action when appropriate, either 
in a federal court or before an administrative law judge, and 
negotiates settlements.  

Division: Division of Investment Management; 
Roles and responsibilities: Regulates investment companies (such as 
mutual, closed-end, and exchange-traded funds), some insurance 
products, and federally registered investment advisers.  

Division: Division of Economic and Risk Analysis[A]; 
Roles and responsibilities: Serves as SEC's "think tank" on economic 
issues. Associated with the entire range of SEC activities, including 
policymaking, rule making, enforcement, and examination. The division 
also assists in SEC's efforts to identify, analyze, and respond to 
risks and trends, including those associated with new financial 
products and strategies.  

Division: Division of Trading and Markets; 
Roles and responsibilities: Establishes and maintains standards for 
fair, orderly, and efficient markets. The division regulates major 
securities market participants, including the securities exchanges, 
broker-dealers, self-regulatory organizations, and transfer agents 
(parties that maintain records of stock and bond owners).  

Division: Office of Compliance Inspections and Examinations; 
Roles and responsibilities: Administers examination and inspection 
program of the registered entities, including broker-dealers, transfer 
agents, investment advisers, investment companies, national securities 
exchanges, clearing agencies, self-regulatory organizations, and the 
Public Company Accounting Oversight Board.  

Source: SEC. 

[A] On June 6, 2013, SEC renamed the Division of Risk, Strategy, and 
Financial Innovation to the Division of Economic and Risk Analysis.  

[End of table]  

To carry out its mission, SEC employs staff with a range of skills and 
backgrounds, such as attorneys, accountants, and economists. As of 
September 30, 2012, SEC employed 3,829 staff. Of these staff, 
approximately 43 percent were attorneys, 26 percent were accountants 
or financial analysts, and 4 percent were examiners. The remaining 27 
percent were other professional, technical, administrative, and 
clerical staff. To help SEC attract and retain qualified employees, 
Congress enacted the Investor and Capital Markets Fee Relief Act (Pay 
Parity Act) in 2002 that allowed SEC to implement a new compensation 
system with unique pay scales comparable to those of other federal 
financial regulators.[Footnote 11] SEC staff are represented by the 
National Treasury Employees Union (hereafter, the SEC employees' 
union). 

SEC's Performance Management System:  

SEC's performance management system, also known as the Evidence-Based 
Performance Management System, includes individual development plans 
for all employees, a performance appraisal rating system, a feedback 
process, and a process for supervisors to deal with poor performance. 
The current performance appraisal system has criteria by which all SEC 
employees are rated in relation to work objectives and competency-
based performance standards, such as critical thinking and teamwork. 
Staff are rated on the objectives and standards on a scale of 1-
5.[Footnote 12] SEC calculates an overall rating for each employee by 
averaging their ratings for the objectives and standards.[Footnote 13] 
As designed, employees' ratings eventually would be used to calculate 
the employee's pay-for-performance. SEC developed this system in 2010 
and continues to negotiate aspects of the design and implementation of 
its current performance management system with the SEC employees' 
union.[Footnote 14] For example, to date SEC has not instituted the 
pay-for-performance aspect of the system for nonsupervisory, 
bargaining unit staff because of ongoing negotiations. 

OPM's Human Capital Assessment and Accountability Framework:  

OPM advocates the use of HCAAF, which is a set of tools and strategies 
available to federal agencies that assist officials in achieving 
results in personnel management programs.[Footnote 15] HCAAF guides 
the assessment of agency efforts, while allowing enough flexibility 
for agencies to tailor these efforts to their missions, plans, and 
budgets. The framework uses five standards for success, lists key 
questions to consider, and suggests performance indicators for 
measuring progress and results. The five standards for success are as 
follows:  

* Strategic alignment. Agency strategies for human capital management 
are aligned with mission, goals, and organizational objectives and are 
integrated into its strategic plan and performance budget. 

* Leadership and knowledge management. Agency leaders and managers 
effectively manage people, ensure continuity of leadership, sustain a 
learning environment that drives continuous improvement in 
performance, and provide a means to share critical knowledge across 
the organization. 

* Results-oriented performance culture. The agency has a diverse, 
results-oriented, high-performing workforce and a performance 
management system that effectively differentiates between high and low 
levels of performance and links individual/team/unit performance to 
organizational goals and desired results. 

* Talent management. The agency has closed gaps or deficiencies in 
skills, knowledge, and competencies for mission-critical occupations, 
and made meaningful progress toward closing such gaps or deficiencies 
in all occupations used in the agency. 

* Accountability. A data-driven, results-oriented planning and 
accountability system guides the agency's decisions on human capital 
management. 

OPM has been providing some updates to the HCAAF model to federal 
agencies; however, OPM officials with whom we spoke stated that 
agencies would continue operating under the current HCAAF model until 
the end of fiscal year 2013 because the updated version has not been 
fully implemented. They noted that the updates to HCAAF reinforce 
existing content and streamline the systems to make HCAAF more 
practical to use. The updated version of HCAAF, called the Human 
Capital Framework, reduces the number of systems from five to four 
(strategic alignment, talent management, performance culture, and 
evaluation). 

SEC's Organizational Culture Hinders Agency's Ability to Effectively 
Fulfill Its Mission:  

Based on our analysis of the views of many SEC employees, our 
previously issued reports on SEC, and recent studies from SEC and 
third parties, we have determined that the agency's organizational 
culture is not constructive and could hinder its ability to 
effectively fulfill its mission. Organizations with more constructive 
cultures generally perform better and are more effective. Within 
constructive cultures, employees also exhibit a stronger commitment to 
mission focus, accountability, coordination, and adaptability. 
[Footnote 16] In describing the agency's culture, many current and 
four former SEC employees talked about low levels of employee morale, 
employees' distrust of management, and the compartmentalized, 
hierarchical, and risk-averse nature of the organization. These views 
are consistent with our past work as well as the work of others. 

SEC's culture reflects low employee morale. More than half of 
nonsupervisory staff and about 43 percent of supervisory staff 
disagreed that employee morale is generally high most of the time. 
About a quarter of senior officers had the same view (see table 2). We 
also found that 44.7 percent of nonsupervisory staff and 30 percent of 
supervisors did not agree that management has taken steps to improve 
employee morale. 

Table 2: Survey Responses from SEC Employees about Morale, as of 
January-March 2013:  

Survey statement: Employee morale is generally high most of the time:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 29.8%; 
Supervisory staff: 38.2%; 
Senior officers: 54.7%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 14.5%; 
Supervisory staff: 18.2%; 
Senior officers: 20.3%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 54.1%; 
Supervisory staff: 42.6%; 
Senior officers: 25.0%. 

Response category: Do not know; 
Nonsupervisory staff: 1.2%; 
Supervisory staff: 0.8%; 
Senior officers: 0.0%. 

Response category: No response checked; 
Nonsupervisory staff: 0.4%; 
Supervisory staff: 0.3%; 
Senior officers: 0.0%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

According to a number of staff who provided written survey comments, 
morale is low for various reasons, ranging from lack of effective 
leadership and communication to dissatisfaction with the performance 
management system and opportunities for promotion. Furthermore, many 
staff who participated in our one-on-one interviews commented that the 
implementation of the five-point performance rating scale resulted in 
arbitrary ratings and that they perceived favoritism in promotions. 
Many other staff commented that staff morale was low. These sentiments 
were similar to our past findings. For example, we reported in 2001 
that SEC had not created an organizational culture that ensured 
ongoing attention to personnel management issues and that SEC staff 
did not think the agency sufficiently valued and motivated staff. 
[Footnote 17] Our findings in this report are also consistent with the 
Partnership for Public Service's analysis of OPM's 2012 Employee 
Viewpoint Survey.[Footnote 18] The analysis found that SEC's overall 
index score--which measures staff's general satisfaction and 
commitment--declined from 73.1 in 2007 to 56 in 2012.[Footnote 19] 
Compared with other midsize agencies, SEC ranked 19 of 22 in overall 
satisfaction and commitment. The decrease in morale among staff may 
negatively affect their productivity and commitment to the agency's 
mission. 

SEC's culture reflects an atmosphere of distrust. When asked whether 
there is an atmosphere of trust at SEC, many staff disagreed. As shown 
in table 3, 40 percent of nonsupervisory staff and about 30 percent of 
supervisory staff thought there was a lack of trust. About 17 percent 
of senior officers voiced this viewpoint. 

Table 3: Survey Responses from SEC Employees about Trust, as of 
January-March 2013:  

Survey statement: There is an atmosphere of trust in my office/office:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 45.1%; 
Supervisory staff: 59.0%; 
Senior officers: 73.4%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 13.4%; 
Supervisory staff: 10.5%; 
Senior officers: 7.8%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 40.0%; 
Supervisory staff: 30.3%; 
Senior officers: 17.2%. 

Response category: Do not know; 
Nonsupervisory staff: 1.1%; 
Supervisory staff: 0.3%; 
Senior officers: 1.6%. 

Response category: No response checked; 
Nonsupervisory staff: 0.4%; 
Supervisory staff: 0; 
Senior officers: 0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Survey respondents offered explanations for the lack of trust. From 
their written comments on SEC's organizational culture, lack of trust 
was among the more frequently mentioned topics. For example, one 
survey respondent indicated that the atmosphere of distrust was due to 
a lack of direct communication with and knowledge sharing from 
managers. Based on comments from several respondents, the adverse 
working relationship between the union and management may have 
contributed to the level of distrust between staff and upper 
management by constantly assuming the worst in senior managers' 
initiatives and other actions. The lack of trust may undermine the 
working relationships between management and staff. 

SEC's culture is compartmentalized. Many current and three former 
staff described SEC's culture as "siloed"--that is, work is 
compartmentalized in each division and little communication, 
collaboration, or movement occurs between the divisions. Despite 
recent SEC efforts to improve intra-agency communication that we 
discuss later in this report, issues remain. According to our survey, 
at least one-third of nonsupervisory staff and supervisors said that 
in the past 12 months, they had not contacted staff in other divisions 
(except for Enforcement) in the home office for work-related issues, 
such as coordinating activities or asking for expert advice.[Footnote 
20] Further, about 21 percent of nonsupervisory staff said that 
communication between other divisions on work-related matters is not 
encouraged.[Footnote 21] Others have identified similar issues. For 
example, a 2009 SEC IG report found that the Division of Enforcement 
did not always seek assistance from other offices and divisions as 
needed during its investigation of the Madoff Ponzi scheme; 
consequently Enforcement staff had difficulty understanding key 
aspects of Madoff's fraud.[Footnote 22] Similarly, a 2011 SEC IG 
report found that the level of communication between OCIE and 
Enforcement after a referral--that is, noteworthy information from an 
OCIE examination passed on to Enforcement for further investigation or 
action--was not always consistent in the regional offices, which can 
hinder SEC's ability to achieve its mission.[Footnote 23] 

In addition, the 2011 Boston Consulting Group's report also noted that 
SEC's culture impaired communication and collaboration between 
divisions. Each division's internal structure was tailored to division-
specific needs, and SEC historically placed limited emphasis on using 
formalized mechanisms for cross-divisional collaboration. [Footnote 
24] Furthermore, according to three former SEC officials, managers 
generally have not encouraged staff to move between divisions and work 
in different areas. The former officials told us that managers did not 
encourage staff to move around because they were afraid to lose a 
staff slot in their division. One former official explained that staff 
often were reluctant to discuss their desire to rotate among divisions 
because such interest might be misinterpreted as a desire to leave 
SEC. A compartmentalized environment could result in missed 
opportunities for leveraging knowledge and skills of staff across the 
divisions and may have contributed to past enforcement failures. 

SEC's culture is hierarchical. Many current staff and two former SEC 
officials described the agency's culture as hierarchical. Close to 42 
percent of nonsupervisory staff did not agree that they had a voice in 
decisions that affected them and their work environment (see table 4). 
One former SEC director told us that although nonsupervisory and lower-
level supervisory staff might have the most knowledge of a particular 
matter, they did not speak out very much because staff are not 
encouraged to challenge ideas or challenge more senior-level staff. 

Table 4: Survey Responses from SEC Employees about Having a Voice in 
Decision Making, as of January-March 2013:  

Survey statement: I have a voice in decisions that affect me and my 
work environment:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 38.3%; 
Supervisory staff: 63.1%; 
Senior officers: 92.2%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 17.9%; 
Supervisory staff: 12.1%; 
Senior officers: 4.7%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 41.8%; 
Supervisory staff: 23.6%; 
Senior officers: 1.6%. 

Response category: Do not know; 
Nonsupervisory staff: 1.3%; 
Supervisory staff: 0.0; 
Senior officers: 0.0. 

Response category: No response checked; 
Nonsupervisory staff: 0.8%; 
Supervisory staff: 1.3%; 
Senior officers: 1.6%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

The 2011 Boston Consulting Group report also stated that, while good 
communication existed at the most senior level, information did not 
always travel down as effectively as it should. Such hierarchical 
culture may discourage open communication and innovation because staff 
may be reluctant to speak up and share ideas. 

SEC culture is risk averse. Many current staff and two former 
officials described SEC's culture as risk averse, and some also noted 
that aversion to risk has grown in recent years. In our survey of SEC 
employees, more than half of staff (supervisory and nonsupervisory) 
and more than 62 percent of senior officers agreed that the fear of 
public scandals may have contributed to the culture of risk aversion 
at SEC (see table 5). For example, a few senior officers and staff 
surveyed remarked that recent enforcement failures and related, 
sustained criticism from members of Congress, SEC's former Inspector 
General, and the public has contributed to their unwillingness to take 
risks and innovate. 

Table 5: Survey Responses from SEC Employees about Risk Aversion, as 
of January-March 2013:  

Survey statement: Fear of public scandals has made SEC overly cautious 
and risk-averse:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 54.5%; 
Supervisory staff: 57.4%; 
Senior officers: 62.5%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 16.7%; 
Supervisory staff: 14.6%; 
Senior officers: 12.5%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 21.0%; 
Supervisory staff: 24.6%; 
Senior officers: 25.0%. 

Response category: Do not know; 
Nonsupervisory staff: 7.5%; 
Supervisory staff: 2.3%; 
Senior officers: 0.0. 

Response category: No response checked; 
Nonsupervisory staff: 0.3%; 
Supervisory staff: 1.3%; 
Senior officers: 0.0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Furthermore, close to half of the staff (both nonsupervisory and 
supervisory) agreed that the fear of being wrong has made some senior 
officers reluctant to take a stand on important issues (see table 6). 
Many current SEC staff we surveyed and two former SEC officials 
indicated that added layers of review--which have been added because 
of this fear, according to staff--not only decreased efficiency but 
also slowed decision making. 

Table 6: Survey Responses from SEC Employees about Taking a Stand on 
Issues, as of January-March 2013:  

Survey statement: The fear of being wrong makes senior officers in my 
division/office reluctant to take a stand on important issues: 
Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 46.6%; 
Supervisory staff: 44.1%; 
Senior officers: 21.9%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 15.1%; 
Supervisory staff: 13.6%; 
Senior officers: 12.5%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 26.6%; 
Supervisory staff: 38.5%; 
Senior officers: 62.5%. 

Response category: Do not know; 
Nonsupervisory staff: 10.9%; 
Supervisory staff: 3.6%; 
Senior officers: 3.1%. 

Response category: No response checked; 
Nonsupervisory staff: 0.8%; 
Supervisory staff: 0.3%; 
Senior officers: 0.0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

A number of staff who responded to our survey provided specific 
instances of risk aversion. For instance, according to a few survey 
respondents, managers have been afraid to close cases or make 
decisions because senior officers want to minimize the chances that 
they would be criticized later. Another survey respondent added that, 
due to such risk aversion, cases that address evolving market 
practices or developments with little precedent may not be pursued. 

We and others have previously reported similar results. In 2009, we 
found that Enforcement's internal system for case review slowed cases, 
created an atmosphere of fear and insecurity, and may have created 
incentives for staff to drop cases or narrow the scope of a review. 
[Footnote 25] Similarly, in 2010, the SEC IG reported that the desire 
for Enforcement staff to avoid difficult cases was partly due to 
challenges in dealing with the agency's bureaucracy. According to a 
former SEC senior officer, the arduous process of obtaining approval 
to recommend an enforcement action by SEC headquarters was a factor in 
deciding which investigations to pursue. The IG also noted there 
appeared to be an increased focus on easier, "slam dunk" cases over 
those cases that looked to be complex and more time consuming. 
[Footnote 26] As a result, the cases chosen for investigations may not 
have effectively identified potential securities violations. 

As it takes years for an organization's culture to take hold, it also 
may take years to effect changes to that culture. Such change requires 
sustained efforts by senior management to address challenges related 
to organizational culture. We found that for organizations to 
successfully transform themselves, they often must change their 
culture fundamentally. An effective personnel management system is 
critical to achieving this cultural transformation. 

Improving Personnel Management Is Critical for SEC's Effectiveness:  

SEC has not consistently or fully implemented practices for effective 
personnel management practices. Specifically, we found deficiencies or 
limitations in the areas of workforce and succession planning, 
performance appraisals and incentives, and communication and 
collaboration. SEC has taken some steps to address aspects of these 
deficiencies or limitations, but most of the agency's efforts are in 
the early stages and could be enhanced. Prioritizing and enhancing 
personnel management efforts are critical for SEC's ability to achieve 
its mission and goals. Moreover, sustained leadership and attention in 
these efforts from SEC's COO could help the agency overcome the 
natural resistance to change, marshal the resources needed to 
implement change, and build and maintain an organization-wide 
commitment to new ways of doing business.[Footnote 27] 

SEC Lacks Comprehensive Plans to Help Ensure Its Workforce Has the 
Necessary Skills:  

SEC has not yet developed a comprehensive workforce plan. A workforce 
plan encompasses systematic processes for identifying and addressing 
the gaps between current and future workforce needs. According to OPM 
guidance, effective workforce plans align workforce requirements with 
agency strategic plans, develop a comprehensive picture of gaps in 
competencies and future requirements, and inform decision making about 
how best to structure the organization and deploy the workforce. For 
example, a workforce plan could provide SEC management information on 
the types, number, and location of supervisory and nonsupervisory 
staff. A plan could also help management determine the type of 
training and other strategies needed to close gaps, while taking into 
consideration factors including the ratio of management to staff, 
industry trends, workforce diversity, and projections of retirements. 
[Footnote 28] Moreover, according to OPM guidance, succession planning 
forms an integral part of workforce planning and helps ensure an 
ongoing supply of qualified staff to fill leadership and other key 
positions.[Footnote 29] In September 2012, we concluded that such a 
plan is essential for helping ensure that SEC has the right mix of 
talent, skills, and experience to execute its mission and goals. 
[Footnote 30] 

Key principles for effective workforce planning from our past work 
also has shown that it is important for agencies to ensure that their 
strategic workforce planning efforts (1) involve top management, 
staff, and other stakeholders; (2) identify the critical skills and 
competencies that will be needed to achieve current and future 
programmatic results, including evaluation of gaps; (3) develop 
strategies that are tailored to address skills gaps; (4) build the 
internal capability needed to address administrative, training, and 
other requirements important to support workforce planning strategies; 
and (5) include plans to monitor and evaluate the agency's progress 
toward meeting its human capital goals.[Footnote 31] These findings 
are consistent with OPM guidance.[Footnote 32] 

Although SEC has not yet developed a comprehensive workforce plan, 
SEC's OHR has been actively working to do so.[Footnote 33] In response 
to the Boston Consulting Group report, OHR began to identify 
competency gaps, which is an important step in workforce planning. 
[Footnote 34] In late 2011, OHR completed a workforce profile that 
provided a snapshot of current workforce composition (including 
information on the number and types of mission-critical occupations, 
education, tenure, and supervisory status) to better understand 
current workload gaps and workforce availability among divisions and 
offices. SEC's OHR also began working with the divisions to identify 
skill gaps. To further assess competency gaps, in October 2012 OHR 
sent each division and office questionnaires to determine what new 
functions existed and the number of positions needed to undertake 
those functions. In April 2013, SEC hired a staff member with 
expertise in workforce planning who is to focus on workforce planning 
efforts. The planner is to integrate workforce data and help SEC 
effectively carry out remaining workforce planning goals. In May 2013, 
SEC also hired a staff member with expertise in succession planning. 
[Footnote 35] 

SEC also has initiated strategies, such as hiring and training, to 
close skills gaps. For example, SEC'S OHR began working with the 
divisions to hire staff with necessary specialized and financial 
industry expertise. Many SEC staff with whom we spoke in one-on-one 
interviews indicated that the recent actions SEC has taken helped 
address issues related to the competence of staff across the agency. 
For example, our survey showed that 86 percent of nonsupervisory staff 
and supervisors indicated that their division was able to attract 
talented and qualified staff. Additionally, the majority of 
nonsupervisory staff, supervisors, and senior officers who responded 
to our survey indicated the training they received provided them with 
the right skills to meet SEC's needs. Furthermore, participants in 
about half of our 22 focus groups said that training opportunities had 
increased and improved in quality. Similarly, one industry 
representatives with whom we spoke also told us that SEC staff 
generally had the right set of skills to carry out SEC's mission 
effectively. 

SEC has also expanded developmental opportunities for staff. For 
instance, SEC has increased technical and developmental opportunities 
for nonsupervisory staff by offering leadership development courses 
through SEC University.[Footnote 36] While all supervisors can take 
the core leadership courses, selected courses are made available for 
nonsupervisory staff to promote career development to a managerial 
position. SEC also has offered other tools, including a 360 degree 
feedback program and executive coaching service to support the 
development of SEC's supervisors.[Footnote 37] 

While SEC has taken steps towards identifying and addressing its 
workforce competency gaps, these efforts have not reflected all of the 
elements of effective workforce planning and strategies articulated in 
OPM guidance. During our review, OHR officials told us that the agency 
has not conducted a thorough analysis of its workforce to 
comprehensively identify competency gaps, including those related to 
the right mix of staff to supervisors. Without a comprehensive 
approach to identify these gaps, any strategies to address them will 
not be fully effective. As indicated in our survey, more than 50 
percent of nonsupervisory staff and supervisors responded that 
management in their divisions could do more to address skill gaps. 
Moreover, some SEC staff and supervisors have raised questions about 
the appropriateness of the ratio of staff to managers. For instance, 
SEC nonsupervisory and supervisory staff with whom we spoke in the 
focus groups and those we surveyed expressed varying views on the 
ratio of staff to managers; some thought it was appropriate, others 
thought there were too many managers. When we asked SEC's OHR how they 
determined an appropriate ratio, they told us that it is dependent on 
the complexity of the program or activity. Historically, each division 
took the lead in making those types of decisions, as well as decisions 
related to hiring and identifying training needs. 

Additionally, SEC has not developed a comprehensive management 
succession program to fill agency supervisory positions, contrary to 
regulatory requirements.[Footnote 38] Specifically, it lacks a 
transparent process for leadership succession, including how it 
identifies and grooms high-potential leaders, as outlined in OPM 
guidance and federal regulations.[Footnote 39] Staff also perceived 
the promotion process as unfair. The development of a succession plan 
might help address pronounced staff dissatisfaction with the promotion 
process. For example, a more transparent process could enable staff to 
have a better understanding of how high-potential leaders from within 
the agency are identified and make the promotion process appear less 
unfair. While SEC has written selection criteria for promotion, 
several nonsupervisory staff with whom we spoke in one-on-one 
interviews and whom we surveyed viewed SEC's methods for promoting 
individuals to supervisory positions as unclear and potentially 
biased. Almost 55 percent of nonsupervisory staff responded that 
promotion to management was mostly based on connections that staff had 
with management (see table 7). In addition, participants in 7 of our 
22 focus groups said that it was unclear how certain individuals were 
selected for promotion. We found similarities between SEC employee 
viewpoints and those of employees at other federal agencies. For 
example, according to OPM's 2012 Federal Employee Viewpoint Survey, 
which surveyed employees from 82 federal agencies, comprising 97 
percent of the agencies in the executive branch, 33.5 percent of 
government employees responding to the survey agreed (or strongly 
agreed) that promotions in their work unit were based on merit, about 
29.2 percent neither agreed nor disagreed, and 37.3 percent disagreed 
(or strongly disagreed). 

Table 7: Survey Responses from SEC Employees about Promotion to 
Management, as of January-March 2013:  

Survey statement: Promotion to management is mostly based on the 
connection that staff have with management[A]:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 54.9%; 
Supervisory staff: 35.6%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 14.6%; 
Supervisory staff: 19.2%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 12.4%; 
Supervisory staff: 39.5%. 

Response category: Do not know; 
Nonsupervisory staff: 17.6%; 
Supervisory staff: 4.9%. 

Response category: No response checked; 
Nonsupervisory staff: 0.6%; 
Supervisory staff: 0.8%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390). 

Source: GAO. 

[A] This question was not included in the survey to senior officers. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Additionally, many staff we surveyed and with whom we spoke in one-on-
one interviews also did not think there was much incentive to be 
promoted into management positions. For example, slightly more than 
half of nonsupervisory staff and almost 75 percent of supervisors who 
responded to our survey indicated that there was not much incentive to 
be promoted because the salary increase would be minimal (see table 
8). Staff in 7 of the 22 groups said staff had little incentive to 
become managers because the differences in pay were minimal. 
Similarly, 1 in 10 staff with whom we met individually said there were 
no financial incentives to apply for a promotion to the first-level 
supervisor position. Senior officers had mixed views about the 
incentives for promotion. According to OHR officials, the pay 
differential (traditionally, 6 percent) between nonmanagers and 
managers has been eroded and in some cases eliminated. Because of the 
federal pay freeze, while nonmanagers have received merit increases 
every year, managers have not received any increases. 

Table 8: Survey Responses from SEC Employees about Incentives for 
Promotion, as of January-March 2013:  

Survey statement: There is not much incentive to get promoted into a 
management position because the salary increase is minimal:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 51.6%; 
Supervisory staff: 74.1%; 
Senior officers: 42.2%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 16.8%; 
Supervisory staff: 6.7%; 
Senior officers: 10.9%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 20.3%; 
Supervisory staff: 17.2%; 
Senior officers: 42.2%. 

Response category: Do not know; 
Nonsupervisory staff: 10.9%; 
Supervisory staff: 1.3%; 
Senior officers: 3.1%. 

Response category: No response checked; 
Nonsupervisory staff: 0.3%; 
Supervisory staff: 0.8%; 
Senior officers: 1.6%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (63). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Until SEC completes a comprehensive workforce plan, the agency will be 
limited in its ability to meet its workforce needs. According to 
agency officials, SEC has been slow to adopt comprehensive workforce 
planning because human capital planning has not been considered an 
area of high priority. OHR officials explained that SEC priorities 
were concentrated on mission-critical functions and, as such, OHR 
focused on fulfilling and complying with essential OPM reporting 
requirements because of resource constraints. Additionally, OHR 
officials noted that, prior to the recent release of SEC's first human 
capital strategic plan in 2012, human capital efforts generally were 
loosely put together and not formally linked to SEC's overall 
strategic plan. Our previous work has shown that sustained leadership 
attention by the COO or other officials will be important to address 
these concerns.[Footnote 40] Without comprehensive workforce and 
succession plans, SEC will be limited in its ability to make well-
informed decisions about how to best meet agency needs today and into 
the future. 

Implementation of SEC's Performance Management System Could Be 
Improved:  

The design of SEC's performance management system reflects some 
characteristics of an effective system but could be improved. 
According to OPM guidance (primarily HCAAF) and our past work, an 
effective performance management system typically encompasses 
expectations that are set for staff, monitoring of staff's work that 
results in performance appraisals, feedback to staff on their 
performance and ways to improve it, and recognition of staff's 
contributions.[Footnote 41] More specifically, effective performance 
management systems include:  

* performance appraisals that distinguish between levels of 
performance and reward strong performance, 

* meaningful and timely feedback discussions, 

* actions to address poor performance, 

* mechanisms to ensure supervisors properly use the system, and:  

* periodic staff validation of the system to ensure its credibility. 

SEC's performance management system includes an appraisal system that 
consists of ratings designed to differentiate between levels of 
performance. The performance management system also requires 
supervisors and senior officers to use performance results to offer 
feedback, identify developmental needs, and address instances of poor 
performance. The system also includes steps and actions to address 
poor performance. 

However, our work, as well as outside studies, suggests that SEC's 
implementation of its performance management system could be improved. 
SEC staff expressed many concerns about the implementation of the 
performance management system. For example, staff expressed concerns 
about the link between their performance and ratings, limited 
performance incentives, unconstructive feedback, and the extent of 
actions taken to address poor performance. SEC senior officers 
expressed concerns about the system as well. By not addressing these 
implementation concerns, the agency could face challenges in retaining 
a high-quality workforce that is actively engaged in the work of SEC, 
which in turn, could affect the agency's ability to adequately carry 
out its mission. 

Performance Appraisal System and Incentives:  

According to HCAAF, an effective performance management system 
distinguishes between levels of performance and rewards strong 
performance. Although the design of SEC's performance appraisal system 
reflects these elements, SEC staff raised a number of concerns related 
to how the appraisal system is applied, and the link between their 
performance and incentives (that is, pay and rewards). Our survey 
results revealed that about 43 percent of nonsupervisory staff did not 
believe their performance appraisals are fair and appropriate (see 
table 9). Similarly, participants in the majority of the focus groups 
we conducted with nonsupervisory staff stated that their ratings were 
arbitrary and not meaningful, and that their ratings under the current 
appraisal system did not fully reflect their accomplishments. In 
contrast, most supervisors and senior officers that responded to our 
survey indicated that they thought staff performance appraisals were 
fair and appropriate. 

Table 9: Survey Responses from SEC Employees about Fairness and 
Appropriateness of Performance Appraisals, as of January-March 2013:  

Survey statement: Employee performance appraisals are fair and 
appropriate under SEC's performance management system:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 20.1%; 
Supervisory staff: 51.8%; 
Senior officers: 70.3%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 21.0%; 
Supervisory staff: 18.5%; 
Senior officers: 17.2%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 42.8%; 
Supervisory staff: 26.9%; 
Senior officers: 10.9%. 

Response category: Do not know; 
Nonsupervisory staff: 14.8%; 
Supervisory staff: 1.5%; 
Senior officers: 0. 

Response category: No response checked; 
Nonsupervisory staff: 1.2%; 
Supervisory staff: 1.3%; 
Senior officers: 1.6%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100% (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

A 2012 study of SEC's performance management system, conducted by an 
independent third party, found similar results.[Footnote 42] 
Specifically, almost half of the nonsupervisory staff that responded 
to that study's survey indicated that their appraisal rating did not 
accurately reflect their performance. We compared SEC employee 
viewpoints from our survey to those of employees at other federal 
agencies and identified differences. According to OPM's 2012 Federal 
Employee Viewpoint Survey, about 16 percent of employees government-
wide responding to the survey disagreed (or strongly disagreed) that 
their performance appraisal was a fair reflection of their performance. 

Staff also raised concerns about whether the system, as implemented, 
rewarded strong performance. A little more than one-third of 
nonsupervisory SEC staff who responded to our survey indicated that 
there was a clear link between their performance and recognition of 
it; about the same amount said that a clear link did not exist (see 
table 10). 

Table 10: Survey Responses from SEC Employees about Performance and 
Recognition, as of January-March 2013:  

Survey statement: There is a clear link between my performance and 
recognition of it:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 37.6%; 
Supervisory staff: 60.5%; 
Senior officers: 59.4%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 17.4%; 
Supervisory staff: 14.1%; 
Senior officers: 20.3%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 38.6%; 
Supervisory staff: 24.6%; 
Senior officers: 18.8%. 

Response category: Do not know; 
Nonsupervisory staff: 5.5%; 
Supervisory staff: 0; 
Senior officers: 0. 

Response category: No response checked; 
Nonsupervisory staff: 1.0%; 
Supervisory staff: 0.8%; 
Senior officers: 1.6%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100% (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

We also heard concerns related to the link between performance and pay 
from staff in our focus groups. According to nonsupervisory and 
supervisory staff in 17 of the 22 focus groups we conducted, the 
performance appraisal process was not meaningful, as bargaining unit 
staff who received an acceptable rating received the same pay increase 
(measured in percentage) regardless of the rating score. OHR officials 
acknowledged that all bargaining unit staff across SEC that received 
an acceptable rating received the same pay increase (percentage) 
during fiscal year 2012. According to these officials, SEC has not 
been able to implement the pay-for-performance element of the system 
because negotiations with the employees' union remain ongoing. Such 
across-the-board pay increases weaken the link between pay and 
performance. In contrast, SEC has put in place pay-for-performance for 
supervisors and senior officers. Most supervisors (almost 61 percent) 
and senior officers (almost 60 percent) who responded to our survey 
said a clear link existed between their performance and recognition of 
it. 

Staff also expressed concerns with the awards process. SEC has an 
awards program that is designed to recognize employee contributions 
above and beyond normal job requirements and provide monetary and 
nonmonetary awards.[Footnote 43] However, more than 60 percent of 
nonsupervisory staff and about 43 percent of supervisory staff who 
responded to our survey indicated that they did not think the criteria 
for rewarding staff were clearly defined. In addition, staff in the 
majority of nonsupervisory focus groups we conducted asserted that the 
awards process was not transparent. For example, staff told us that it 
was unclear what was required to receive an award for strong 
performance and why some staff received awards and others did not. 
Senior officers with whom we spoke in one division had similar 
perspectives and stated that the criteria and tasks associated with 
different levels of awards were not sufficiently transparent. In some 
of the focus groups we conducted, SEC staff also told us that the 
awards themselves, partly due to budget constraints, were not 
particularly meaningful. Some supervisors also commented that they had 
few means to motivate staff. 

Feedback:  

According to OPM guidance, an effective performance management system 
requires and encourages meaningful feedback discussions. Moreover, it 
states that meaningful feedback provides opportunities for supervisors 
to offer specific details on staff's performance and suggestions on 
how staff can improve certain aspects of his/her performance. SEC 
requires supervisors and managers to conduct a formal feedback meeting 
at the end of the performance cycle and to provide feedback to each of 
their staff on their performance that is specific, descriptive, and 
objective. SEC also encourages supervisors and managers to solicit 
questions from staff during performance feedback session. 

The majority of SEC nonsupervisory and supervisory staff are generally 
satisfied with the feedback they received. According to our survey of 
nonsupervisory and supervisory staff, the majority of respondents 
indicated that they received useful feedback from their direct 
supervisors (see table 11). 

Table 11: Survey Responses from SEC Employees about Feedback from 
Direct Supervisors, as of January-March 2013:  

Survey statement: My direct supervisor provides useful and 
constructive feedback[A]:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 65.3%; 
Supervisory staff: 70.5%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 11.9%; 
Supervisory staff: 9.5%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 20.1%; 
Supervisory staff: 16.7%. 

Response category: Do not know; 
Nonsupervisory staff: 1.0%; 
Supervisory staff: 1.0%. 

Response category: No response checked; 
Nonsupervisory staff: 1.6%; 
Supervisory staff: 2.3%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390). 

Source: GAO. 

[A] This question was not included in the survey to senior officers. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

However, some nonsupervisory staff raised concerns about the quality 
of the feedback they received. About 20 percent of nonsupervisory 
staff that responded to our survey indicated that they did not receive 
useful or constructive feedback. Among these respondents, some 
commented that the feedback was vague or did not provide specific 
suggestions for improvement. Similarly, some staff in our focus groups 
said that they did not receive meaningful feedback. We found 
similarities between SEC employee viewpoints and those of employees at 
other federal agencies.[Footnote 44] However, in the 2012 third-party 
study, nearly half of SEC employees who completed the survey indicated 
that they had not received meaningful feedback from their supervisors, 
and the study found that about a quarter of the respondents did not 
indicate that they had a formal feedback session during the annual 
rating period when the survey was conducted.[Footnote 45] In focus 
groups and interviews we conducted with nonsupervisory and supervisory 
staff, timeliness was generally not identified as an issue related to 
feedback. 

SEC has taken steps to address some staff's concerns about feedback. 
For example, SEC has provided training to supervisors on how to 
provide clear performance expectations and effectively counsel staff 
on their performance. However, implementing mechanisms to monitor 
supervisors' efforts to provide meaningful feedback could provide SEC 
with greater assurance that its supervisors are providing feedback to 
staff as intended and that staff have the information to maintain or 
adjust their performance accordingly. 

Actions to Address Staff Performance:  

OPM guidance states that an effective performance management system 
outlines actions that supervisors should take to address staff 
performance and, in particular, staff who are not meeting performance 
expectations. Such actions are important because they attempt to 
rectify poor performance that could be affecting an agency's ability 
to achieve its mission or goals. SEC's system includes a process to 
address poor performing staff. Specifically, those who receive an 
overall rating of unacceptable are placed on a performance improvement 
plan that requires them to meet certain goals to demonstrate 
improvement. To complete the improvement plan, staff must maintain the 
improved level of performance for the duration of the plan. If staff 
do not improve and sustain performance at an acceptable level during 
the duration of the plan, SEC can demote or dismiss the staff. 

Although SEC's performance management system includes such elements, 
employees reported concerns about how SEC addressed poor performing 
supervisors and staff. 

* Poor performing supervisors. According to the results from our 
survey, staff generally do not think SEC senior officers or 
supervisors effectively deal with poor performers. About 56 percent of 
the nonsupervisory staff and about 47 percent of supervisory staff who 
responded to our survey indicated that senior officers do not deal 
effectively with poor performing supervisors (see table 12). 
Similarly, in about one-third of our focus groups, nonsupervisory 
staff and supervisors both stated that SEC generally had not taken 
actions against poor supervisors. In contrast, a little more than half 
of the senior officers who responded to our survey reported that they 
dealt effectively with poor-performing supervisors. 

Table 12: Survey Responses from SEC Employees about How Senior 
Officers Dealt with Poorly Performing Supervisors, as of January-March 
2013:  

Survey statement: Overall, senior officers deal effectively with poor-
performing supervisors and managers:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 5.3%; 
Supervisory staff: 24.9%; 
Senior officers: 56.3%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 9.9%; 
Supervisory staff: 15.1%; 
Senior officers: 17.2%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 56.2%; 
Supervisory staff: 46.7%; 
Senior officers: 23.4%. 

Response category: Do not know; 
Nonsupervisory staff: 28.4%; 
Supervisory staff: 13.3%; 
Senior officers: 3.1%. 

Response category: No response checked; 
Nonsupervisory staff: 0.1%; 
Supervisory staff: 0; 
Senior officers: 0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100% (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

* Poor performing staff. More than 50 percent of both nonsupervisory 
staff and supervisors who responded to our survey indicated that 
supervisors did not deal effectively with poorly performing staff (see 
table 13). Some supervisors commented that dealing with poor-
performing staff often is very time-consuming. Similarly, according to 
results from OPM's 2012 Federal Employee Viewpoint Survey, 43 percent 
of employees government-wide responding to the survey disagreed (or 
strongly disagreed) that in their work unit, steps were taken to deal 
with a poor performer who could not or would not improve. 

Table 13: Survey Responses from SEC Employees about How Supervisors 
Dealt with Poorly Performing Staff, as of January-March 2013:  

Survey statement: Overall, supervisors and managers deal effectively 
with poor-performing staff[A]:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 9.6%; 
Supervisory staff: 28.5%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 12.4%; 
Supervisory staff: 12.8%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 51.1%; 
Supervisory staff: 55.1%. 

Response category: Do not know; 
Nonsupervisory staff: 26.6%; 
Supervisory staff: 3.1%. 

Response category: No response checked; 
Nonsupervisory staff: 0.3%; 
Supervisory staff: 0.5%. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390). 

Source: GAO. 

[A] This question was not included in the survey to senior officers.  

[End of table]  

When we spoke to OHR officials about how SEC has dealt with poor 
performing staff, they told us that actions taken against poor 
performing staff are confidential and, as a result, SEC staff may not 
be aware of how poor performance has been addressed. According to OHR 
officials, from 2007 through June 2013, SEC placed 38 staff under 
performance improvement plans. Subsequently, 2 staff were terminated, 
10 resigned, 3 were reassigned within SEC, 18 successfully completed 
the improvement plan, 1 has a proposed removal pending, and 4 are 
still in the performance improvement plan period as of June 2013. 
[Footnote 46] 

Mechanisms to Monitor Supervisors' Use of the Performance Management 
System:  

According to OPM guidance, an effective performance management system 
monitors how supervisors use the system and provide feedback to staff, 
includes performance standards for supervisors in these areas, and 
requires that supervisors' performance in these areas be part of their 
feedback and performance evaluations. Without such mechanisms, it is 
more difficult to ensure accountability in how aspects of the 
performance management system are applied, especially the performance 
appraisal process whereby supervisors assess a subordinate's 
performance, develop a corresponding rating, recognize their 
performance, and deliver feedback to the subordinate about his or her 
performance. 

While SEC has performance standards related to supervisors' use of the 
performance management system, we did not identify specific mechanisms 
for how SEC monitors supervisors' use of the system. For example, 
while staff have the option to prepare written narratives on how they 
assess their own performance for that rating period, we did not 
identify mechanisms that monitor how supervisors use information from 
staff narratives to help ensure they prepare complete and accurate 
appraisal ratings for staff. Senior officers in the six divisions told 
us they reviewed narratives that supervisors wrote to support a 
subordinate's rating for the purpose of ensuring that the narrative 
supported the rating. However, this only serves to ensure that the 
narrative supports a rating, and not that the rating itself is an 
accurate representation of the subordinate's performance. For example, 
consistent with OPM guidance, senior officers could assess how well 
supervisors monitor and assess staff performance by comparing the 
summaries that staff prepare assessing their own work against the 
ratings that supervisors prepare for these staff. Moreover, we found 
that some supervisors with whom we spoke have had limited discussions 
with their own supervisors about how they use the system to recognize 
and reward strong staff performance, provide feedback to staff, or 
take actions to deal with poor performance. 

Without such mechanisms, there is an increased risk that 
accountability for performance appraisal processes and activities--
such as developing ratings and delivering feedback--will be 
diminished. Mechanisms that monitor how the system is being applied 
and used by supervisors, such as ongoing feedback conversations 
between supervisors and their superiors, could help ensure that staff 
are receiving appraisals that reflect all of their performance during 
the rating period, are being provided meaningful feedback, and that 
poor performance is addressed in a timely and effective manner. 
Sustained management attention would help encourage the development of 
such mechanisms. 

Validation of System:  

We previously concluded that an effective performance management 
system includes periodic validation of the system to help ensure its 
credibility.[Footnote 47] Validating the system typically refers to 
obtaining staff input and general agreement on the competencies, 
rating procedures, and other aspects of the system. 

SEC has taken some steps to obtain staff input on a portion of its 
performance management system. Specifically, SEC sought staff input on 
the creation of the performance standards for various occupations, 
including attorneys and examiners. However, managers validated and 
finalized these performance standards. Furthermore, we could not 
identify additional SEC efforts to obtain staff input on other aspects 
of its performance management system, such as the performance 
appraisal process. The safeguards that we previously identified are 
key to successful implementation of performance management systems in 
the federal government. We identified these safeguards based on our 
work looking at the performance management practices used by leading 
public sector organizations in the United States and in other 
countries, as well as our experiences in implementing a modern 
performance management system for our own staff at GAO. Among these 
safeguards, we've stated that it is vital for agencies to directly 
involve staff in the implementation of all aspects of a performance 
management system. According to OHR officials, they plan to validate 
the performance management system once SEC and the union reach 
agreement on the revisions currently being negotiated, but it is 
unclear when they will reach agreement since they have been in 
negotiations for several years. Validating the performance management 
system with staff input on aspects beyond performance standards and 
objectives could help enhance the credibility of SEC's performance 
management system among its staff, including the ratings, recognition, 
or feedback that they receive as a result. 

SEC Has Yet to Fully Address Barriers to Communication and 
Collaboration:  

Although SEC has improved intra-agency communication and 
collaboration, barriers still exist. As discussed previously in this 
report, current and former SEC staff and others use words like "siloed 
communication" and "hierarchical" to describe SEC's culture. Such an 
environment can hinder SEC's ability to effectively carry out its 
mission by limiting communication and collaboration among the 
divisions. For example, as noted earlier in this report, SEC's IG has 
reported on how this lack of communication and collaboration may have 
contributed to past enforcement failures. 

According to HCAAF, supervisors and managers should foster an 
environment of open communication. Such communication, as found in our 
previous work, can facilitate a collaborative environment, enable more 
efficient work processes, and prevent misunderstandings. Open and 
effective communication occurs when information flows down, across, 
and up the organization. Frequent communication among collaborating 
divisions within an agency provides a means by which to facilitate 
working across intra-agency boundaries.[Footnote 48] In prior work, we 
identified practices that can help to enhance and sustain 
collaboration among federal agencies, which can help to maximize 
performance and results, and have recommended that agencies follow 
them. These collaborative practices include identifying common 
outcomes, establishing joint strategies, leveraging resources, 
determining roles and responsibilities, and developing compatible 
policies and procedures, among others. 

SEC has taken some steps to address its communication challenges and 
enhance collaboration within and among divisions. 

* Enforcement created national specialized units to focus its 
investigations on high-priority areas such as asset management, market 
abuse, and structured and new products in August 2009. The specialized 
units work with OCIE and other divisions to identify high-risk areas 
for further examination and investigation. Over the last year, 
Enforcement also has taken steps to improve headquarters interactions, 
including developing guidelines for the role of trial counsel in 
investigations and investigative staff in litigated matters. The 
division also formed an advisory committee, which according to SEC 
officials includes supervisors and managers, to identify broader 
cultural or structural reforms to improve coordination. 

* OCIE created the National Examination Program (NEP) in 2010 to 
emphasize intra-agency collaboration and increase communication among 
different regional offices and divisions. OCIE established a 
standardized set of policies and procedures for conducting 
examinations under NEP to enhance coordinated examination and 
inspection activities. OCIE also established regular monthly national 
teleconferences of examiners across regions and headquarters, 
developed new processes for communicating with Enforcement about new 
and pending examination referrals, and set mutual goals with other 
divisions. 

* Several divisions also created new offices or subunits to help 
facilitate communication and collaboration with other divisions. For 
example, according to SEC officials, OCIE, Enforcement, and Investment 
Management hired new communication managers in fiscal year 2013 to 
develop more robust internal communication within their programs. 

* In January 2013, SEC's Office of Public Affairs established a cross-
divisional internal communications working group to help ensure that 
appropriate attention is given to internal communication within the 
agency. 

Both SEC staff and external stakeholders have started to see some 
positive effects from the recent efforts to bolster communication and 
collaboration. For example, when asked whether communication between 
divisions on work-related matters was encouraged, about 54 percent of 
nonsupervisory staff, 75 percent of supervisors, and 94 percent of 
senior officers strongly or somewhat agreed that such communication 
was encouraged. When asked about the effects of these recent efforts, 
specifically those that senior officers were making to improve 
communication and collaboration between divisions, many staff viewed 
these efforts as positive. For example, nonsupervisory staff (38 
percent) and many supervisors (62 percent) thought that senior 
officers were making a moderate to great effort to improve 
collaboration among divisions.[Footnote 49] Representatives from one 
of the industry groups with whom we spoke said recent improvements in 
coordination across SEC's regional offices has reduced the duplicative 
efforts that in the past incurred unnecessary time and money. The 
representatives also noted that in meetings with SEC, multiple SEC 
divisions often have been represented. 

Although the agency has taken efforts to improve its intra-agency 
communication and collaboration, staff continued to identify barriers 
to effective communication and collaboration among the divisions, 
within divisions, and between staff and management, contrary to 
collaborative best practices. For example, many nonsupervisory staff 
and supervisors who responded to our survey commented on communication 
issues and challenges, such as that they were frustrated that relevant 
and timely information was not freely communicated across units 
because of the need to obtain management approval to share such 
information. Rather than leveraging resources, according to some 
staff, various divisions function as individual "fiefdoms." Former 
senior SEC officials with whom we spoke individually explained that 
some supervisors and senior officers felt the need to protect their 
"turf" and status in the agency by not sharing information. 
Furthermore, representatives from SEC's union told us that management 
frowned on communication across divisions without going through formal 
channels. As noted earlier, about one-third of the SEC staff who 
responded to our survey said they had not contacted staff in other 
divisions (outside of Enforcement) over the last year on work-related 
matters, such as coordinating activities or seeking expert advice. 
But, according to senior officers with whom we spoke from multiple 
divisions, cross-division communication and collaboration may not be 
necessary in many instances. They told us that staff involved in 
rulemaking are concentrated in a relatively small group of 
individuals, and staff in similar specialized roles may have fewer 
work-related opportunities or reasons to reach out across the agency 
for expertise or to coordinate work. 

SEC staff also said barriers to communication and collaboration among 
offices in the same division exist. For example, they identified 
working relationships between investigative and trial attorneys in 
headquarters as a challenge. Senior officers in Enforcement told us in 
an interview that investigative attorneys in headquarters end their 
involvement in a matter once they complete their investigation and 
hand it off to the trial unit for prosecution. Further, the two units 
report to different supervisors and are located in different physical 
spaces, leading to inefficiencies due to a lack of continuity and 
collaboration, which are essential when building and prosecuting 
cases. For example, a trial attorney told us that there are times when 
the evidence that the investigative attorneys produce is not 
sufficient to successfully try a case and as a result they either have 
to gather additional evidence, or they choose not to pursue the case 
and waste the past efforts of the investigators. This process is 
inconsistent with best practices related to intra-agency 
collaboration--such as identifying joint strategies designed to help 
align different division and subdivision activities and resources with 
the aim of achieving a common outcome. In contrast, investigative and 
trial attorneys in the regional offices work together collaboratively 
throughout the investigation and trial phases. Both units report to 
the same supervisor and are co-located. According to staff, reporting 
to the same supervisor and being co-located helps the attorneys to 
stay in constant communication and collaborate from the beginning to 
the end of a case, facilitating their work. 

Concerns were also raised about the nature of communication between 
managers and staff. Nonsupervisory staff were divided about whether 
supervisors included staff in the flow of relevant information, but 
the majority of supervisors thought they effectively included staff in 
the flow of information (see table 14). Many nonsupervisory staff and 
supervisors who responded to our survey commented that they were 
frustrated that relevant and timely information was not freely 
communicated among higher-and lower-level staff. For instance, several 
commented that the downward flow of information was nearly nonexistent 
or filtered, while upward flow (particularly staff suggestions to 
management) was not encouraged.[Footnote 50] Some nonsupervisory staff 
with whom we spoke characterized this as senior officers and 
supervisors "controlling" the flow of information. 

Table 14: Survey Responses from SEC Employees about Flow of Relevant 
Information, as of January-March 2013:  

Survey statement: Supervisors and managers ensure that employees are 
included in the flow of relevant information[A]:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 47.7%; 
Supervisory staff: 73.1%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 11.6%; 
Supervisory staff: 7.9%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 39.0%; 
Supervisory staff: 19.0%. 

Response category: Do not know; 
Nonsupervisory staff: 1.3%; 
Supervisory staff: 0. 

Response category: No response checked; 
Nonsupervisory staff: 0.3%; 
Supervisory staff: 0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390). 

Source: GAO. 

[A] This question was not included in the survey to senior officers. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Staff views again were divided about support for two-way 
communication. As shown in table 15, about half of the nonsupervisory 
and supervisory staff indicated their divisions supported open and two-
way communication between staff and management. Roughly one-third of 
staff indicated that their divisions did not support such 
communication. During our review, we did not identify any steps that 
SEC has taken to systematically address challenges associated with two-
way communication between staff and management. 

Table 15: Survey Responses from SEC Employees about Open Communication 
between Staff and Management, as of January-March 2013:  

Survey statement: My division/office supports open, two-way 
communication between staff and management:  

Response category: Strongly agree/somewhat agree; 
Nonsupervisory staff: 49.5%; 
Supervisory staff: 55.1%; 
Senior officers: 93.8%. 

Response category: Neither agree or disagree; 
Nonsupervisory staff: 13.5%; 
Supervisory staff: 14.1%; 
Senior officers: 4.7%. 

Response category: Strongly disagree/somewhat disagree; 
Nonsupervisory staff: 35.4%; 
Supervisory staff: 29.0%; 
Senior officers: 1.6%. 

Response category: Do not know; 
Nonsupervisory staff: 0.9%; 
Supervisory staff: 0.5%; 
Senior officers: 0. 

Response category: No response checked; 
Nonsupervisory staff: 0.6%; 
Supervisory staff: 1.3%; 
Senior officers: 0. 

Total; (number of respondents); 
Nonsupervisory staff: 100%; (1,462); 
Supervisory staff: 100%; (390); 
Senior officers: 100%; (64). 

Source: GAO. 

Note: Percentages may not always add to 100 due to rounding.  

[End of table]  

Despite recent efforts to break down silos, we found that they 
continue to exist, and communication between staff and management 
still tends to be top-down. Such an environment can hinder SEC's 
ability to effectively carry out its mission by limiting communication 
and leading collaboration practices. Without a sustained management 
focus on implementing leading communication and collaboration 
practices, SEC continues to face increased risks of inefficiencies and 
less-than-optimal decision making about its market oversight, 
investigative, and enforcement functions. SEC can also foster and 
encourage more communication and collaboration among its staff by, for 
example, setting formal expectations for its supervisors to foster an 
environment of communication and collaboration, as well as recognizing 
exceptional teamwork, which it currently does not. These efforts would 
be consistent with OPM guidance in recognizing and rewarding an 
environment of teamwork.[Footnote 51] 

SEC Has Not Developed a System to Monitor and Evaluate Its Personnel 
Management Activities:  

SEC has not developed an accountability system to monitor and evaluate 
its personnel management programs and systems (such as its workforce 
and succession planning functions and performance appraisal system). 
According to HCAAF, an accountability system is intended to evaluate 
results and provide consistent means for an agency to monitor and 
analyze its performance on all aspects of human capital management 
policies, programs, and systems. 

The accountability system also contributes to an agency's performance 
by identifying and monitoring necessary improvements. The 
accountability system should provide for annual assessments of an 
agency's progress and results related to human capital management. The 
results should inform an agency's human capital goals and objectives, 
in conjunction with strategic planning and performance budgets. 
Moreover, OPM officials also explained that the accountability system 
is an integral part of an evaluation system that OPM uses to determine 
how well agencies are monitoring and evaluating their human capital 
activities and programs. 

According to OHR officials, human capital functions at SEC had not 
been a priority until 2009. As a result, limited resources had been 
allocated to human capital functions, such as the development of an 
accountability system. However, SEC's OHR officials said they have 
been developing such a system, and noted that implementing this 
comprehensive system would be a multiyear project. However, during our 
audit, OHR officials did not provide us with any specific 
documentation on the development of the system, how it will be 
implemented, and what steps will be taken to ensure its completion. In 
commenting on a draft of this report, SEC stated that they have 
recently developed milestones and deliverables for the implementation 
of the system, which SEC anticipates will be fully implemented by the 
end of this calendar year. Until a system is put into place, SEC may 
be missing opportunities to take a more comprehensive approach to 
improving its personnel management. Moreover, without the information 
such a system generates, it will be difficult for SEC to identify 
systemic problems related to its personnel management or to correct 
them. 

Conclusions:  

Maintaining a top-notch, high-performing workforce is critical to SEC 
effectively carrying out its existing and new regulatory 
responsibilities in increasingly complex markets. However, SEC's 
organizational culture has not been conducive to motivating and 
encouraging a high level of performance--many staff indicated that 
morale is low and a significant percentage characterize the atmosphere 
of the agency as one of distrust. Successfully transforming 
organizational culture requires an effective personnel management 
system. While personnel management traditionally has not been a 
priority at SEC, the agency has placed a new emphasis on it. However, 
continued work--and sustained leadership attention--would help to 
address a number of personnel management issues. 

First, SEC lacks planning mechanisms to guide decision making about 
the appropriate number and skill mix of staff and does not have a 
transparent process to identify and develop potential leaders for 
future needs. OPM guidance outlines elements of effective workforce 
and succession plans, including action plans that help agencies move 
forward expeditiously and maintain a focus on developing leaders with 
the necessary managerial skills to effectively manage the agency's 
workforce. SEC is developing workforce and succession plans, but has 
been slow to adopt such plans. Developing workforce and succession 
plans in line with OPM guidance would help ensure that SEC's planning 
efforts were comprehensive, systematic, and forward looking and 
focused on obtaining, training, and retaining the workforce and 
leadership to help the agency achieve its mission. 

Second, nonsupervisory and supervisory staff perceptions about SEC's 
performance appraisal system were broadly negative--many staff viewed 
the way that the system was used as arbitrary and ineffective and some 
supervisors expressed concern about the system lacking meaningful 
incentives for strong performance. While SEC's performance appraisal 
system reflects many elements of OPM guidance, no system, regardless 
of how well it is designed, will meet its intended purpose if it is 
not implemented well. SEC's implementation of its performance 
management system could be improved by creating ways to monitor how 
supervisors use the system to recognize and reward performance, 
provide meaningful feedback, and effectively address poor performers 
and by conducting periodic validations with staff input (and making 
changes, as appropriate), consistent with key principles identified in 
our past work. Although developing a performance appraisal system that 
is appreciated by all SEC staff should not be the goal of SEC's 
efforts, developing and implementing a system that is credible is 
critical. Without a credible system, its value and merit will continue 
to be questioned. 

Third, while SEC has taken steps towards improving intra-agency 
communication, roughly one-third of staff indicated that their 
divisions did not support two-way communication between staff and 
management. Because these are long-standing concerns, sustained 
leadership to improve communication and collaboration within SEC is 
important and exploring and implementing leading communication and 
collaboration practices could better position SEC to address these 
issues. We previously reported that top leadership attention of a COO 
could build and maintain an organization-wide commitment to new ways 
of doing business. Furthermore, SEC could implement incentives for all 
staff to foster open communication and collaboration as well as hold 
them accountable for doing so. For example, SEC could recognize 
exceptional teamwork efforts through special awards and set formal 
expectations of its supervisors to foster an environment of 
communication and collaboration. By enhancing its ongoing efforts and 
taking more steps to improve intra-agency communication throughout the 
agency, SEC can improve operations and address widely held views of 
the agency as "siloed" and "hierarchical."  

Finally, SEC has not yet implemented a system to continually monitor 
and evaluate its personnel management system--the activities, 
policies, and programs that include its workforce planning efforts and 
performance appraisal system. According to OPM guidance, such routine 
monitoring and evaluation enables agencies to refine and adjust their 
approaches to help ensure the ongoing effectiveness of personnel 
management activities. SEC has started work to develop an 
accountability system. Prioritizing the development of such a system 
and ensuring that it is consistent with HCAAF guidance and standards 
would put SEC firmly on a path to better plan, sustain, and refine its 
personnel management strategies over the long term. 

Recommendations for Executive Action:  

To help SEC address identified personnel management challenges, the 
Chairman should take the following seven actions. 

To enhance SEC's ability to strategically hire and retain the 
appropriate number of staff with the requisite skill sets for today 
and in the future, the Chairman of SEC should direct the COO and OHR 
to:  

* prioritize efforts to expeditiously develop a comprehensive 
workforce plan, including a succession plan, and establish time frames 
for implementation and mechanisms to help ensure that the plans are 
regularly updated; and:  

* incorporate OPM guidance as it develops its workforce and succession 
plans, by developing a formal action plan to identify and close 
competency gaps, and fill supervisory positions; and institute a fair 
and transparent process for identifying high-potential leaders from 
within the agency. 

To help enhance the credibility of its performance management system, 
the Chairman of SEC should direct the COO and OHR to:  

* create mechanisms to monitor how supervisors use the performance 
management system to recognize and reward performance, provide 
meaningful feedback to staff, and effectively address poor 
performance; for example, by requiring ongoing feedback discussions 
with higher-level supervisors; and:  

* conduct periodic validations (with staff input) of the performance 
management system and make changes, as appropriate, based on these 
validations. 

To build on SEC's efforts to enhance intra-agency communication and 
collaboration, the Chairman should direct the COO to:  

* identify and implement incentives for all staff to support an 
environment of open communication and collaboration, such as setting 
formal expectations for its supervisors to foster such an environment, 
and recognizing and awarding exceptional teamwork efforts; and:  

* explore communication and collaboration best practices and implement 
those that could benefit SEC. 

Finally, to increase accountability of SEC's personnel management 
system, the Chairman of SEC should direct the COO and OHR to:  

* prioritize and expedite efforts to develop and implement a system to 
monitor and evaluate personnel management activities, policies, and 
programs, including establishing and documenting the steps necessary 
to ensure completion of the system. 

Agency Comments:  

We provided SEC a draft copy of this report for review and comment. 
SEC provided written comments that are reprinted in appendix V. In 
written comments, SEC agreed with our recommendations. SEC 
acknowledged that improvements could be made in SEC's personnel 
management and noted that our report contained useful information that 
will help the agency strengthen personnel management. The letter also 
stated that SEC was committed to investing the time and resources to 
improve its organizational culture and personnel management. For 
example, as we noted in our report, SEC plans to improve its ability 
to identify and address workforce competency gaps through its newly 
established workforce and succession planning function. Three staff 
members will coordinate all workforce succession planning agency-wide. 
In addition, the letter noted that SEC recently implemented pay-for-
performance for nonbargaining unit employees, would assess the impact 
of the system on those employees, and offer additional training to 
managers. SEC also agreed that interagency communication and 
collaboration remained challenges, but said these issues were a top 
priority and SEC would continue to leverage the results from the steps 
it is taking to improve in this area. For example, SEC indicated that 
OCIE has recently formed nine specialized working groups, involving 
over 600 staff from across the agency, to facilitate the sharing of 
information on key risk areas and industry trends. SEC also stated 
that it has recently added an Assistant Regional Director of 
Operations position in each regional office to help facilitate 
communication and ensure consistency across the agency. Finally, SEC 
described its most recent progress--developing key milestones and 
deliverables--in implementing an accountability system and to monitor 
and evaluate the personnel management system by the end of this 
calendar year. SEC anticipated that the system would address the 
concerns we cited in this report about aligning human capital 
practices and strategic goals. We updated our report to reflect SEC's 
recent progress on this issue. 

We are sending copies of this report to interested congressional 
committees and SEC. The report also is available at no charge on the 
GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact A. Nicole Clowers at (202) 512-8678 or clowersa@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff who 
made major contributions to this report are listed in appendix VI. 

Signed by:  

A. Nicole Clowers: 
Director: 
Financial Markets and Community Investment:  

[End of section]  

Appendix I: Objectives, Scope, and Methodology:  

This report examines (1) what is known about the Securities and 
Exchange Commission's (SEC) organizational culture and (2) SEC's 
personnel management challenges and its efforts to address these 
challenges. We focused the scope of our review on all five divisions 
and one office primarily responsible for implementing the agency's 
mission--Divisions of Corporation Finance; Enforcement; Investment 
Management; Economic and Risk Analysis; Trading and Markets; and the 
Office of Compliance Inspections and Examinations (OCIE). For purposes 
of this report, we refer to these divisions and office as divisions. 
In the six divisions, we focused on employees in four occupational 
categories (accountants, attorneys, examiners, and financial analysts) 
that account for the majority of SEC employees and on all senior 
officers in those divisions. We reviewed management consultant 
reports, and SEC reports, SEC IG reports, and testimonies to describe 
what is known about SEC personnel management challenges and any agency 
initiatives (either planned or under way) to address them during the 
past few years. We reviewed the methodology of the management 
consultant reports and SEC IG studies and determined that they were 
sufficiently reliable for the purposes of our report; however, the 
results should not necessarily be considered as definitive, given the 
potential methodological or data limitations contained in the studies 
individually or collectively. We also assessed SEC policies, 
procedures, and practices against applicable federal regulations 
related to personnel management, the Office of Personnel Management's 
(OPM) Human Capital Assessment and Accountability Framework (HCAAF), 
GAO reports on human capital practices and standards for internal 
control, and SEC's strategic plan for fiscal years 2010-2015.[Footnote 
52] 

To conduct our work, we examined SEC policies and procedures for 
carrying out personnel management responsibilities, including 
recruitment and training, performance appraisal, supervision, 
promotion processes, and communication within and among SEC divisions. 
In addition, we met with SEC's Office of Human Resources and senior 
leaders from the divisions to discuss and collect information on their 
views on SEC's organizational culture, personnel management 
challenges, and future plans to address these challenges. We also 
interviewed SEC's Inspector General officials, four former SEC 
employees, SEC union leaders and members, two management consultants 
who previously worked with SEC, representatives from two industry 
trade groups, and two academics with knowledge of SEC personnel 
management issues to obtain their views on the agency's organizational 
culture, personnel management challenges, and what, if anything, SEC 
can do to address these challenges. 

We also conducted eight semistructured group interviews with 
nonsupervisory staff. Each group interview consisted of employees from 
one division to facilitate rapport among the participants. To select 
participants to take part in the first six sessions, we relied on the 
assistance of SEC union leaders to recruit volunteers from each of the 
divisions, To select participants for the last two sessions, we sent e-
mails to nonsupervisory staff who were not union members to invite 
them to take part in group interview sessions for employees in the 
Division of Enforcement and OCIE, two of the largest divisions at SEC. 
For each 2-hour interview, we asked participants to share their views 
on SEC's organizational culture, what was working well or not well in 
relation to SEC personnel management, and what could be done to 
address any challenges.[Footnote 53] The information we gathered 
during these interviews provided an initial understanding of 
participants' views on these issues and was used to inform the design 
of later data collection methods. 

Our methods for gathering perspectives from current SEC employees on 
organizational culture and personnel management issues included 
semistructured one-on-one interviews, focus groups, and two web-based 
surveys of all SEC employees (including senior officers) in the 
selected divisions and occupational groups. This combination of data 
collection techniques was carried out sequentially, so that knowledge 
gained from one technique could be used to inform the design of the 
next. For example, based on information learned through our interview 
efforts, we designed questions used in the focus group effort that 
followed.[Footnote 54] 

Individual interviews. We interviewed 129 employees (92 nonsupervisory 
staff and 37 supervisors and senior officers) at SEC headquarters (in 
person) and regional offices (by telephone or e-mail) during 3 weeks 
from July through September 2012. We created opportunities for all SEC 
employees from the six divisions and four occupational categories to 
meet or communicate with us individually. At headquarters, we 
established office hours during which employees could speak with GAO 
analysts. To encourage open communication, we had separate office 
hours for nonsupervisory and supervisory employees. During the same 
period, we set up a GAO toll-free phone number and e-mail account to 
communicate with employees in the regional offices or headquarters who 
could not attend the office hours. We asked certain key questions of 
every person and interjected additional questions as appropriate. We 
also presented SEC Section 962 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Dodd-Frank Act), which describes the 
elements of our study.[Footnote 55] We then asked them to describe 
SEC's organizational culture, what was working well or not in relation 
to personnel management at SEC, and what could be done to address 
challenges. Employees were encouraged to talk openly and freely. To 
maintain the confidentiality of individual responses, we collected and 
analyzed the information by division and rank only, and aggregated our 
findings so that no individual comments could be identified. 

We conducted a content analysis to summarize key themes that emerged 
from the individual interviews. Two GAO analysts independently read 
notes from 23 interviews and made a judgment about appropriate codes 
that described the themes. The analysts compared their decisions and 
reconciled any disagreements, resulting in the following set of coding 
categories: (1) personnel management areas in which SEC has been doing 
well; (2) areas in which there might be challenges, including views on 
SEC's organizational culture; (3) any comments on initiatives under 
way to address the challenges; and (4) any recommendations for 
addressing the initiatives. This process was replicated several times 
before finalizing the coding structure. Once the coding structure was 
finalized, the content of 129 sets of notes was coded by one analyst 
and then separately reviewed by a second analyst who indicated 
agreement or disagreement with the code. The two analysts then made 
changes based on their resolution to those differences. 

Focus Groups. We conducted 22 focus groups with approximately 200 
randomly selected SEC staff and supervisors at headquarters and in 
four regional offices (Forth Worth, Texas; Los Angeles, California; 
Miami, Florida; and New York, New York) from September through 
December 2012.[Footnote 56] We selected the regional offices based on 
factors including (1) the size and significance of the regional 
office's enforcement and examination activities as well as the 
significance of the industry that the regional office oversees; (2) 
efforts made by regional offices to identify and address personnel 
management issues; and (3) geographical variation. For the focus 
groups, we randomly selected supervisory and nonsupervisory staff from 
Enforcement, Corporation Finance, and OCIE from a list SEC provided. 
Although participants were randomly selected and represented a broad 
cross-section of employees, our results are not statistically 
generalizable.[Footnote 57] We held separate sessions for 
nonsupervisory and supervisory staff. [Footnote 58] For all 22 focus 
groups, all but a few selected employees were able to attend. 

The moderator used a GAO-developed discussion guide to facilitate each 
focus group session and encouraged participants to share their 
thoughts and experiences related to SEC personnel management, 
organizational culture, and what worked well (or not) in relation to 
these issues. Participants also were encouraged to comment on 
initiatives to address personnel management challenges and offer 
suggestions for improvement. For each of the 22 focus groups, GAO 
analysts observed and took notes of the discussion and reviewed them 
to identify recurring themes such as training, leadership, performance 
management, communication, and organizational culture. One GAO analyst 
conducted an initial review of the notes and tabulated the frequency 
of statements expressing certain themes, while a second analyst 
verified the information to ensure the tabulation was accurate and 
that the analyst concurred with the results. 

Surveys. From January through March 2013, we conducted two separate 
self-administered web-based surveys of all 2,439 listed employees 
(nonsupervisors and supervisors) in four occupational categories and 
six divisions, and all 86 senior officers in six divisions.[Footnote 
59] That is, we performed one survey of supervisory and nonsupervisory 
staff and one of senior officers. We chose to survey all staff in the 
targeted divisions and occupational groups instead of a sample to 
provide the largest feasible number of SEC employees a chance to voice 
their opinions. Each survey included questions on (1) personnel 
management issues related to recruitment, training, staff development, 
and resources; (2) communication between and within divisions and 
offices; (3) leadership and management; (4) performance management and 
promotions; and (5) organizational culture and climate. The separate 
survey of all SEC senior officers (those at the SO-1, SO-2, and SO-3 
pay grades) covered the same topic areas, but omitted many questions 
not relevant for senior officers and included additional questions 
specifically relevant for senior officers. 

A total of 1,905 nonsupervisors and supervisors responded to our staff 
survey for a response rate of 78 percent. A total of 64 senior 
officers responded to our senior officer survey for a response rate of 
74 percent. For the staff survey, we carried out a statistical 
nonresponse bias analysis using available administrative data and 
determined that we could not assume the nonrespondents were missing at 
random. For this reason, the results of the staff survey are presented 
as tabulations from a census survey. We do not make any attempt to 
extrapolate the findings to the 22 percent of eligible staff who chose 
not to complete our survey. 

To minimize other types of errors, commonly referred to as nonsampling 
errors, and enhance data quality, we employed recognized survey design 
practices in the development of the questionnaires and the collection, 
processing, and analysis of the survey data. To develop our survey 
questions, we drew on information from the one-on-one interviews, 
focus group sessions, and prior GAO SEC personnel management surveys. 
We pretested the questionnaire with SEC employees. During survey 
development, we reviewed the survey to ensure the ordering of survey 
sections was appropriate and that questions in each section were 
clearly stated and easily comprehended. A GAO survey expert reviewed 
and provided feedback on our survey instrument. To reduce nonresponse, 
another source of nonsampling error, we undertook an intensive follow-
up effort that included multiple e-mail reminders to encourage SEC 
employees to complete the questionnaire. We minimized processing 
errors by having a second independent data analyst conduct an accuracy 
check of the computer programs used for data analysis. Also, having 
the respondents complete questionnaires online eliminated errors 
associated with manual data entry. On the basis of our application of 
these practices and follow-up procedures, we determined that the data 
were of sufficient quality for our purposes. 

To analyze the information we obtained from the open-ended survey 
responses, we reviewed all the comments and then reviewed the content 
of three survey items in more detail to categorize the information 
into different themes. For comments related to communication and 
culture at SEC, one GAO analyst initially coded all the information 
and a second analyst reviewed it separately. Both analysts resolved 
any coding discrepancies before finalizing the results. Because of the 
large number of comments relating to performance management, we 
limited our analysis to the first 150 responses and identified 
examples of recurring themes. We coded the comments as described 
above. Where coding by the two analysts matched, we selected some 
responses to provide anecdotes about perceived issues related to SEC 
performance management. The responses are not representative of the 
views of all SEC employees. We also reviewed OPM's 2012 Federal 
Employee Viewpoint Survey results to obtain additional perspectives 
from SEC staff on the agency's personnel management-related issues. 
[Footnote 60] 

We conducted this performance audit from March 2012 to July 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives.  

[End of section]  

Appendix II: GAO Survey on SEC Personnel and Human Capital Management:  

From January through March 2013, we conducted two separate, self-
administered, web-based surveys of: (1) all 2,439 listed employees 
(nonsupervisors and supervisors) in four occupational categories and 
six divisions and (2) all 86 senior officers in six divisions. 
[Footnote 61] We chose to survey all staff in the targeted divisions 
and occupational groups instead of a sample to provide the largest 
feasible number of SEC employees a chance to voice their opinions. 
Each survey included questions on (1) personnel management issues 
related to recruitment, training, staff development, and resources; 
(2) communication between and within divisions and offices; (3) 
leadership and management; (4) performance management and promotions; 
and (5) organizational culture and climate. The separate survey of all 
SEC senior officers (those at the SO-1, SO-2, and SO-3 pay grades) 
covered the same topic areas, but omitted many questions not relevant 
for senior officers and included additional questions specifically 
relevant for senior officers. The survey is reproduced below. 

Survey Introduction:  

The U.S. Government Accountability Office, an independent agency of 
Congress, has been mandated by the Dodd-Frank Act (Section 962) to 
study personnel management at the Securities and Exchange Commission 
(SEC), including issues related to human capital programs, workforce 
planning, performance management, and communication. As a part of our 
study, we are sending this questionnaire to attorneys, accountants, 
examiners, and financial economists in the Divisions of Corporation 
Finance, Enforcement, Investment Management, Trading and Markets, Risk 
Strategy and Financial Innovation, and the Office of Compliance 
Inspections and Examinations (OCIE) to obtain their opinions about 
various aspects of working at the SEC.[Footnote 62] Your cooperation 
is critical to providing the Congress with complete and balanced 
information on how personnel management is functioning across these 
offices and divisions within the SEC. This questionnaire should take 
about 30 minutes to complete. 

The results of this questionnaire will be used to compile descriptive 
information on SEC's personnel management. GAO pledges to maintain the 
confidentiality of the responses to this survey. Your information will 
be kept confidential and will not be released outside GAO, unless 
compelled by law or requested by the Congress. Our report will provide 
results in summary form; individual answers may be discussed, but we 
will not include any information that could be used to identify 
individual respondents, and any link between the identification number 
assigned to your questionnaire and your identifying information will 
be destroyed. 

All of the questions in this survey can be answered by clicking on 
radio buttons or providing comments in spaces provided at the end of 
each section. Please complete the questionnaire within 10 business 
days of receipt. This questionnaire is divided by topic into six 
sections:  

1. Recruitment, Training, Staff Development, and Resources:  

2. Communication between and within SEC Divisions and Offices:  

3. Leadership and Management:  

4. Performance Management and Promotions:  

5. Organizational Culture and Climate:  

6. Demographics and Background Information; and:  

7. Final Comments. 

Although your participation is voluntary, we urge you to complete this 
questionnaire. We cannot develop meaningful information without your 
frank and honest answers. 

Thank you very much for your time. 

Survey Results of Nonsupervisors and Supervisors:  

Note: For each question, the two rows of results correspond to 
nonsupervisory in the first row and supervisor in the second row. 

1. To what extent do you agree or disagree with the following 
statements on recruitment, hiring and retention? (Select one response 
per item):  

a. My division/office is able to attract talented and qualified 
employees; 
Strongly Agree/Somewhat Agree: 86.4%; 92.6%; 
Neither Agree nor Disagree: 6.4%; 3.3%; 
Strongly Disagree/Somewhat disagree: 5.5%; 3.6%; 
Do Not Know: 1.5%; 0.3%; 
Not Checked: 0.2%; 0.3%.  

b. My division/office retains its most talented and qualified 
employees; 
Strongly Agree/Somewhat Agree: 52.9%; 69.5%; 
Neither Agree nor Disagree: 16.7%; 12.3%; 
Strongly Disagree/Somewhat disagree: 26.9%; 17.4%; 
Do Not Know: 3.1%; 0.3%; 
Not Checked: 0.5%; 0.5%.  

c. Management usually hires employees who are a good fit for SEC's 
mission; 
Strongly Agree/Somewhat Agree: 70.2%; 82.3%; 
Neither Agree nor Disagree: 14.1%; 8.7%; 
Strongly Disagree/Somewhat disagree: 13.1%; 8.5%; 
Do Not Know: 2.0%; 0; 
Not Checked: 0.7%; 0.5%.  

d. When new people start in jobs in my division/office, they are given 
enough guidance and training; 
Strongly Agree/Somewhat Agree: 38.4%; 65.1%; 
Neither Agree nor Disagree: 16.1%; 15.4%; 
Strongly Disagree/Somewhat disagree: 38.8%; 18.0%; 
Do Not Know: 5.8%; 1.0%; 
Not Checked: 1.0%; 0.5%.  

e. Hiring is sometimes based more on personal connections than on 
substantive experience or qualifications; 
Strongly Agree/Somewhat Agree: 23.5%; 15.4%; 
Neither Agree nor Disagree: 20.0%; 8.2%; 
Strongly Disagree/Somewhat disagree: 41.9%; 73.1%; 
Do Not Know: 14.0%; 3.1%; 
Not Checked: 0.6%; 0.3%.  

f. Overall, SEC's Office of Human Resources provides timely support to 
my division/office; 
Strongly Agree/Somewhat Agree: 14.5%; 21.0%; 
Neither Agree nor Disagree: 20.0%; 19.5%; 
Strongly Disagree/Somewhat disagree: 34.8%; 49.2%; 
Do Not Know: 29.8%; 9.7%; 
Not Checked: 0.8%; 0.5%.  

g. SEC's Office of Human Resources has the necessary expertise to 
assist in recruiting and hiring qualified employees; 
Strongly Agree/Somewhat Agree: 10.6%; 12.8%; 
Neither Agree nor Disagree: 18.4%; 21.5%; 
Strongly Disagree/Somewhat disagree: 31.9%; 46.7%; 
Do Not Know: 38.5%; 18.0%; 
Not Checked: 0.6%; 1.0%.  

2. To what extent do you agree or disagree with the following 
statements on training and development opportunities? (Select one 
response per item):  

a. SEC management is committed to the ongoing training and development 
of staff; 
Strongly Agree/Somewhat Agree: 67.0%; 85.1%; 
Neither Agree nor Disagree: 13.1%; 6.9%; 
Strongly Disagree/Somewhat disagree: 18.7%; 6.9%; 
Do Not Know: 0.8%; 0; 
Not Checked: 0.5%; 1.0%.  

b. SEC needs to invest more in the development of new staff; 
Strongly Agree/Somewhat Agree: 72.2%; 62.8%; 
Neither Agree nor Disagree: 17.9%; 18.5%; 
Strongly Disagree/Somewhat disagree: 5.5%; 16.2%; 
Do Not Know: 3.6%; 0.8%; 
Not Checked: 0.8%; 1.8%.  

c. The training I have received over the past three years has provided 
me skills and experience to meet SEC's needs; 
Strongly Agree/Somewhat Agree: 60.3%; 70.3%; 
Neither Agree nor Disagree: 17.2%; 19.0%; 
Strongly Disagree/Somewhat disagree: 20.0%; 9.2%; 
Do Not Know: 1.9%; 0.3%; 
Not Checked: 0.7%; 1.3%.  

d. Employees in my division/office are currently given the same 
opportunities to participate in training programs and events; 
Strongly Agree/Somewhat Agree: 66.8%; 86.2%; 
Neither Agree nor Disagree: 9.8%; 4.9%; 
Strongly Disagree/Somewhat disagree: 16.3%; 6.9%; 
Do Not Know: 6.3%; 1.3%; 
Not Checked: 0.9%; 0.8%.  

e. Management in my division/office needs to do more to address skills 
gaps; 
Strongly Agree/Somewhat Agree: 53.7%; 47.2%; 
Neither Agree nor Disagree: 26.3%; 27.2%; 
Strongly Disagree/Somewhat disagree: 13.5%; 24.4%; 
Do Not Know: 5.8%; 0.3%; 
Not Checked: 0.8%; 1.0%.  

f. Over the past three years, SEC's leadership training has been 
effective in improving the management skills of supervisors and 
managers in my division/office; 
Strongly Agree/Somewhat Agree: 17.8%; 54.6%; 
Neither Agree nor Disagree: 22.4%; 19.0%; 
Strongly Disagree/Somewhat disagree: 39.7%; 22.6%; 
Do Not Know: 19.6%; 2.8%; 
Not Checked: 0.6%; 1.0%.  

3. For those training opportunities that you have been involved with 
over the past three years, to what extent, if at all, have the 
following types of training provided information and knowledge that is 
directly relevant to your work? (Select one response per item):  

a. Training provided by the SEC University; 
To a great extent: 16.6%; 20.0%; 
To a moderate extent: 38.5%; 43.1%; 
To a small extent: 26.8%; 26.7%; 
To no extent: 5.8%; 3.9%; 
No basis to judge: 8.4%; 4.6%; 
Do not know: 3.0%; 1.5%; 
Not checked: 0.8%; 0.3%.  

b. Internal training delivered by SEC staff, but not through SEC 
University; 
To a great extent: 24.3%; 35.1%; 
To a moderate extent: 41.6%; 38.7%; 
To a small extent: 20.0%; 20.3%; 
To no extent: 6.2%; 2.0%; 
No basis to judge: 5.2%; 2.3%; 
Do not know: 1.8%; 1.3%; 
Not checked: 1.0%; 0.3%.  

c. External training or conferences; 
To a great extent: 15.7%; 16.9%; 
To a moderate extent: 28.9%; 35.1%; 
To a small extent: 21.2%; 18.0%; 
To no extent: 10.1%; 10%; 
No basis to judge: 19.0%; 16.9%; 
Do not know: 4.1%; 1.3%; 
Not checked: 1.0%; 1.8%.  

d. Computer-based training delivered by Internet; 
To a great extent: 8.2%; 6.4%; 
To a moderate extent: 29.9%; 32.8%; 
To a small extent: 31.0%; 35.9%; 
To no extent: 12.8%; 9.5%; 
No basis to judge: 12.3%; 12.6%; 
Do not know: 4.2%; 2.1%; 
Not checked: 1.6%; 0.8%.  

4. Have there been opportunities over the past three years for you to 
participate in training that provided the latest industry specific 
knowledge relevant to your job with outside instructors who are 
experts in the field? 

Yes; 73.2%; 80.3%.
No; 18.8%; 14.4%.
Do not know; 7.1%; 4.9%.
Not checked; 0.9%; 0.5%. 

5. In general, how adequate, is the number of training opportunities 
that provide the latest industry specific knowledge relevant to your 
job with outside instructors who are experts in the field? 

More than adequate; 10.9%; 18.0%.
Adequate; 40.5%; 42.1%.
Less than adequate; 41.0%; 35.1%.
Do not know; 7.1%; 4.6%.
Not checked; 0.6%; 0.3%. 

6. Over the past 3 years, how many times have you taken part in 
training that provided the latest industry specific knowledge relevant 
to your job that included outside instructors who are experts in the 
field? 

Never; 11.4%; 11.3%.
Once or twice; 45.7%; 38.7%.
Three or more times; 37.8%; 44.9%.
Do not know; 4.5%; 4.9%.
Not checked; 0.8%; 0.3%. 

7. If there are any other issues, details, or information concerning 
recruitment, training, staff development and resources that you would 
like us to know about, please use the space below to provide this 
information. 

We will not present detailed comments. 

8. To what extent do you agree or disagree with the following 
statements regarding communication within your division/office and 
between your division/office and other SEC offices and divisions? 
(Select one response per item):  

a. Supervisors and managers ensure that employees are included in the 
flow of relevant information; 
Strongly Agree/Somewhat Agree: 47.7%; 73.1%; 
Neither Agree nor Disagree: 11.6%; 8.0%; 
Strongly Disagree/Somewhat disagree: 39.0%; 19.0%; 
Do Not Know: 1.3%; 0; 
Not Checked: 0.3%; 0.  

b. My division/office supports open, two-way communication between 
staff and management; 
Strongly Agree/Somewhat Agree: 49.5%; 72.8%; 
Neither Agree nor Disagree: 13.5%; 10.0%; 
Strongly Disagree/Somewhat disagree: 35.4%; 17.2%; 
Do Not Know: 0.9%; 0; 
Not Checked: 0.6%; 0.  

c. Information is adequately shared across groups in my 
division/office; 
Strongly Agree/Somewhat Agree: 34.1%; 55.1%; 
Neither Agree nor Disagree: 14.1%; 14.1%; 
Strongly Disagree/Somewhat disagree: 47.5%; 29.0%; 
Do Not Know: 3.0%; 0.5%; 
Not Checked: 1.3%; 1.3%.  

d. Communication across groups in my division/office has improved over 
the past three years; 
Strongly Agree/Somewhat Agree: 33.0%; 64.4%; 
Neither Agree nor Disagree: 23.3%; 16.9%; 
Strongly Disagree/Somewhat disagree: 30.3%; 17.2%; 
Do Not Know: 12.8%; 1.0%; 
Not Checked: 0.7%; 0.5%.  

e. Overall, information and knowledge are shared openly at all levels 
within my division/office; 
Strongly Agree/Somewhat Agree: 29.9%; 52.6%; 
Neither Agree nor Disagree: 17.0%; 14.6%; 
Strongly Disagree/Somewhat disagree: 48.7%; 30.3%; 
Do Not Know: 3.8%; 1.3%; 
Not Checked: 0.7%; 1.3%.  

f. In my division/office, communication between other offices and 
divisions (such as between OCIE and CorpFin) on work related matters 
is encouraged; 
Strongly Agree/Somewhat Agree: 54.3%; 75.1%; 
Neither Agree nor Disagree: 18.7%; 14.6%; 
Strongly Disagree/Somewhat disagree: 21.5%; 8.7%; 
Do Not Know: 4.9%; 1.3%; 
Not Checked: 0.7%; 0.3%.  

9. In the past 12 months, how often, if at all, did you typically 
contact employees in the following Home Office divisions or offices 
for work-related issues such as to coordinate activities or ask for 
expert advice? (Select one response per item. Select "Not Applicable" 
if you work in that division or office):  

a. OCIE; 
Daily: 2.5%; 5.4%; 
One or more times a week: 4.2%; 8.7%; 
One or more times a month: 11.6%; 27.7%; 
One or more times in the past 12 months: 34.3%; 32.1%; 
Never: 39.1%; 19.7%; 
Do not know: 1.2%; 0.3%; 
Not applicable: 5.8%; 5.4%; 
Not checked: 1.4%; 0.8%.  

b. Division of Enforcement; 
Daily: 8.0%; 10%; 
One or more times a week: 5.8%; 11.0%; 
One or more times a month: 16.6%; 26.7%; 
One or more times in the past 12 months: 32.6%; 32.8%; 
Never: 21.3%; 10%; 
Do not know: 0.8%; 0.3%; 
Not applicable: 13.1%; 8.5%; 
Not checked: 1.9%; 0.8%.  

c. Division of Corporation Finance; 
Daily: 6.0%; 7.4%; 
One or more times a week: 2.4%; 2.1%; 
One or more times a month: 9.7%; 17.7%; 
One or more times in the past 12 months: 34.7%; 31.0%; 
Never: 33.4%; 28.2%; 
Do not know: 1.0%; 0.5%; 
Not applicable: 10.9%; 11.0%; 
Not checked: 1.9%; 2.0%.  

d. Division of Investment Management; 
Daily: 1.6%; 2.6%; 
One or more times a week: 1.8%; 4.6%; 
One or more times a month: 8.8%; 18.7%; 
One or more times in the past 12 months: 33.7%; 44.9%; 
Never: 45.3%; 23.3%; 
Do not know: 1.2%; 0.5%; 
Not applicable: 6.4%; 4.6%; 
Not checked: 1.2%; 0.8%.  

e. Division of Trading and Markets; 
Daily: 3.6%; 3.6%; 
One or more times a week: 2.8%; 6.2%; 
One or more times a month: 8.8%; 20.3%; 
One or more times in the past 12 months: 35.3%; 36.4%; 
Never: 40.0%; 26.7%; 
Do not know: 1.2%; 0.8%; 
Not applicable: 6.8%; 4.9%; 
Not checked: 1.6%; 1.3%.  

f. Division of Risk, Strategy, and Financial Innovation; 
Daily: 0.8%; 1.0%; 
One or more times a week: 3.0%; 3.9%; 
One or more times a month: 10.3%; 12.6%; 
One or more times in the past 12 months: 23.7%; 38.7%; 
Never: 53.4%; 38.2%; 
Do not know: 1.6%; 2.1%; 
Not applicable: 5.5%; 3.3%; 
Not checked: 1.6%; 0.3%. 

10. In the past 12 months, how often did employees in the following 
Home Office divisions or offices get back to you promptly in response 
to requests for assistance with work-related issues such as to 
coordinate activities or provide expert advice? (Select one response 
per item. Select "Not Applicable" if you work in that division or 
office or if you did not communicate with that division or office in 
the past 12 months):  

a. OCIE; 
Always or almost always: 28.3%; 41.5%; 
Most of the time: 17.3; 25.9%; 
About half of the time: 1.4%; 2.3%; 
Some of the time: 2.7%; 1.8%; 
Never or almost never: 2.2%; 0.8%; 
Do not know: 3.0%; 0.8%; 
Not applicable: 44.1%; 25.1%; 
Not checked: 1.0%; 1.8%.  

b. Division of Enforcement; 
Always or almost always: 32.0%; 39.7%; 
Most of the time: 21.3%; 31.3%; 
About half of the time: 2.4%; 2.6%; 
Some of the time: 3.6%; 3.6%; 
Never or almost never: 2.1%; 0.5%; 
Do not know: 2.3%; 0.8%; 
Not applicable: 35.1%; 21.0%; 
Not checked: 1.4%; 0.5%. 

c. Division of Corporation Finance; 
Always or almost always: 28.04%; 29.5%; 
Most of the time: 17.4%; 22.1%; 
About half of the time: 1.3%; 2.8%; 
Some of the time: 3.3%; 2.3%; 
Never or almost never: 1.9%; 1.0%; 
Do not know: 2.6%; 1.5%; 
Not applicable: 43.9%; 40.0%; 
Not checked: 1.6%; 0.8%.  

d. Division of Investment Management; 
Always or almost always: 22.9%; 32.6%; 
Most of the time: 15.4%; 23.3%; 
About half of the time: 1.6%; 6.4%; 
Some of the time: 2.9%; 2.8%; 
Never or almost never: 2.1%; 1.3%; 
Do not know: 3.4%; 2.6%; 
Not applicable: 49.9%; 29.5%; 
Not checked: 1.7%; 1.5%.  

e. Division of Trading and Markets; 
Always or almost always: 25.4%; 26.7%; 
Most of the time: 16.7%; 27.2%; 
About half of the time: 1.3%; 4.6%; 
Some of the time: 3.1%; 5.1%; 
Never or almost never: 2.4%; 1.8%; 
Do not know: 3.8%; 2.8%; 
Not applicable: 45.3%; 30.8%; 
Not checked: 2.0%; 1.0%.  

f. Division of Risk, Strategy, and Financial Innovation; 
Always or almost always: 22.0%; 26.9%; 
Most of the time: 11.1%; 21.3%; 
About half of the time: 1.3%; 2.1%; 
Some of the time: 1.4%; 1.3%; 
Never or almost never: 1.6%; 0.8%; 
Do not know: 4.4%; 4.1%; 
Not applicable: 55.3%; 42.3%; 
Not checked: 3.0%; 1.3%.  

11. In which location do you currently work? 

Home office (Washington, D.C.): 48.6%; 46.7%.
A regional or district office: 50.8%; 52.8%.
Not checked: 0.6%; 0.5%. 

11a. In the past 12 months, how often, if at all, did you typically 
communicate with employees in the other division or office within your 
Regional Office for work-related issues such as to coordinate 
activities or ask for expert advice? (Select one response per item. 
Select "Not Applicable" if you work in that Office or Division in your 
Regional Office):  

OCIE; 
Daily: 9.5%; 
One or more times a week: 9.9%; 
One or more times a month: 19.5%; 
One or more times in the past 12 months: 28.0%; 
Never: 12.1%; 
Do Not Know: 1.1%; 
Not Applicable: 17.5%; 
Not Checked: 2.4%. 

Division of Enforcement; 
Daily: 14.3%; 
One or more times a week: 8.7%; 
One or more times a month: 13.4%; 
One or more times in the past 12 months: 26.7%; 
Never: 8.9%; 
Do Not Know: 1.1%; 
Not Applicable: 23.8%; 
Not Checked: 3.0%. 

11b. In the past 12 months, how often did employees in the other 
division within your Regional Office get back to you promptly in 
response to requests for assistance with work-related issues such as 
to coordinate activities or provide expert advice? (Select one 
response per item. Select "Not Applicable" if you work in that Office 
or Division or if you did not communicate with that division or office 
in the past 12 months):  

OCIE; 
Always or almost always: 46.1%; 
Most of the time: 16.3%; 
About half of the time: 1.4%; 
Some of the time: 2.3%; 
Never or almost never: 1.2%; 
Do Not Know: 1.6%; 
Not Applicable: 28.9%; 
Not Checked: 2.2%. 

Division of Enforcement; 
Always or almost always: 39.8%; 
Most of the time: 18.7%; 
About half of the time: 1.7%; 
Some of the time: 2.8%; 
Never or almost never: 1.0%; 
Do Not Know: 1.5%; 
Not Applicable: 30.6%; 
Not Checked: 3.9%. 

12. If there are any other issues, details, or information concerning 
communication between and within divisions and offices that you would 
like us to know about, please use the space below to provide this 
information. 

We will not present detailed comments. 

13. To what extent do you agree or disagree with the following 
statements regarding the quality of management and leadership in your 
division/office. (Select one response per item):  

a. Supervisors and managers in my division/office are held accountable 
for achieving results that help SEC meet its goals and priorities; 
Strongly Agree/Somewhat Agree: 42.5%; 74.9%; 
Neither Agree nor Disagree: 13.4%; 6.2%; 
Strongly Disagree/Somewhat disagree: 25.0%; 15.1%; 
Do Not Know: 18.9%; 3.6%; 
Not Checked: 0.3%; 0.3%.  

b. In my division/office, the roles and responsibilities of 
supervisors and managers are clearly defined; 
Strongly Agree/Somewhat Agree: 45.7%; 69.2%; 
Neither Agree nor Disagree: 14.2%; 8.5%; 
Strongly Disagree/Somewhat disagree: 32.2%; 21.8%; 
Do Not Know: 7.7%; 0.3%; 
Not Checked: 0.3%; 0.3%.  

c. Supervisors and managers in my division/office are genuinely 
interested in the opinions of their staff; 
Strongly Agree/Somewhat Agree: 54.9%; 73.3%; 
Neither Agree nor Disagree: 12.2%; 8.7%; 
Strongly Disagree/Somewhat disagree: 30.3%; 17.2%; 
Do Not Know: 1.6%; 0; 
Not Checked: 0.9%; 0.8%.  

d. 360 degree feedback is an effective way for employees to provide 
feedback on the performance of their supervisors; 
Strongly Agree/Somewhat Agree: 50.2%; 47.2%; 
Neither Agree nor Disagree: 12.0%; 15.9%; 
Strongly Disagree/Somewhat disagree: 14.8%; 20.0%; 
Do Not Know: 22.5%; 16.7%; 
Not Checked: 0.5%; 0.3%.  

e. Promotion to management is mostly based on technical skills; 
Strongly Agree/Somewhat Agree: 18.1%; 47.2%; 
Neither Agree nor Disagree: 16.0%; 17.2%; 
Strongly Disagree/Somewhat disagree: 47.4%; 31.3%; 
Do Not Know: 18.5%; 4.1%; 
Not Checked: 0; 0.3%.  

f. Promotion to management is mostly based on the ability to manage 
people effectively; 
Strongly Agree/Somewhat Agree: 13.8%; 41.5%; 
Neither Agree nor Disagree: 12.5%; 15.9%; 
Strongly Disagree/Somewhat disagree: 57.5%; 38.0%; 
Do Not Know: 15.9%; 4.1%; 
Not Checked: 0.4%; 0.5%.  

g. Promotion to management is mostly based on connections that staff 
have with management; 
Strongly Agree/Somewhat Agree: 54.9%; 35.6%; 
Neither Agree nor Disagree: 14.6%; 19.2%; 
Strongly Disagree/Somewhat disagree: 12.4%; 39.5%; 
Do Not Know: 17.6%; 4.9%; 
Not Checked: 0.6%; 0.8%.  

h. There is not much incentive to get promoted into a management 
position because the salary increase is minimal; 
Strongly Agree/Somewhat Agree: 51.6%; 74.1%; 
Neither Agree nor Disagree: 16.8%; 6.7%; 
Strongly Disagree/Somewhat disagree: 20.3%; 17.2%; 
Do Not Know: 10.9%; 1.3%; 
Not Checked: 0.3%; 0.8%.  

i. Over the past 3 years, I have seen SEC staff leave due to being 
dissatisfied with a supervisor or manager; 
Strongly Agree/Somewhat Agree: 57.7%; 46.4%; 
Neither Agree nor Disagree: 10.0%; 13.3%; 
Strongly Disagree/Somewhat disagree: 13.0%; 28.5%; 
Do Not Know: 18.9%; 10.5%; 
Not Checked: 0.4%; 1.3%.  

14. Over the past three years, to what extent, if at all, have the 
Senior Officers (SOs) in your division/office worked to make 
improvements in the areas listed below? (Select one response per item. 
Please note that "division/office" refers to your division or office 
(such as Corporation Finance in the Home Office or a Division or 
Enforcement in a regional office):  

a. Workforce morale; 
To no extent: 30.1%; 19.7%; 
To a small extent: 27.7%; 31.0%; 
To a moderate extent: 18.6%; 27.7%; 
To a great extent: 10.4%; 17.7%; 
No basis to judge: 7.2%; 2.6%; 
Do not know: 5.7%; 1.3%; 
Not checked: 0.3%; 0%.  

b. Collaboration between divisions and offices; 
To no extent: 16.8%; 10.8%; 
To a small extent: 21.7%; 19.2%; 
To a moderate extent: 23.5%; 32.6%; 
To a great extent: 14.5%; 29.5%; 
No basis to judge: 12.2%; 4.4%; 
Do not know: 10.7%; 3.3%; 
Not checked: 0.6%; 0.3%.  

c. Staff training focused on specific competencies; 
To no extent: 14.2%; 10.0%; 
To a small extent: 26.1%; 23.6%; 
To a moderate extent: 28.8%; 37.2%; 
To a great extent: 13.5%; 22.6%; 
No basis to judge: 8.3%; 3.3%; 
Do not know: 8.4%; 3.1%; 
Not checked: 0.6%; 0.3%.  

d. Transparency in the promotion process; 
To no extent: 51.6%; 34.4%; 
To a small extent: 12.4%; 18.7%; 
To a moderate extent: 5.5%; 18.0%; 
To a great extent: 1.9%; 8.7%; 
No basis to judge: 15.3%; 11.5%; 
Do not know: 12.9%; 8.5%; 
Not checked: 0.4%; 0.3%.  

15. Over the past three years, to what extent, if at all, has 
management solicited employees' ideas and suggestions in developing 
initiatives designed to improve communication, the performance 
management system, and training opportunities? (Select one response 
per item):  

Management solicited employees' idea and suggestions in developing:  

a. Initiatives designed to improve communication; 
To a great extent: 9.1%; 20.5%; 
To a moderate extent: 21.3%; 31.5%; 
To a small extent: 20.9%; 22.6%; 
To no extent: 20.3%; 11.5%; 
Not aware of any such initiative: 19.0%; 8.5%; 
Do not know: 8.8%; 5.1%; 
Not checked: 0.6%; 0.3%.  

b. Initiatives designed to improve the performance management system; 
To a great extent: 5.0%; 7.7%; 
To a moderate extent: 13.7%; 16.9%; 
To a small extent: 17.3%; 25.6%; 
To no extent: 32.8%; 20.5%; 
Not aware of any such initiative: 16.8%; 0.8%; 
Do not know: 13.8%; 20.5%; 
Not checked: 0.6%; 8.0%.  

c. Initiatives designed to improve training opportunities; 
To a great extent: 13.5%; 28.2%; 
To a moderate extent: 28.9%; 36.9%; 
To a small extent: 23.5%; 20.5%; 
To no extent: 12.2%; 7.2%; 
Not aware of any such initiative: 11.7%; 2.8%; 
Do not know: 9.1%; 2.8%; 
Not checked: 1.1%; 1.5%.  

[End of table] 

16. Over the past three years, how satisfied have you been with 
initiatives management developed to improve communication, the 
performance management system, and training opportunities? (Select one 
response per item):  

a. Initiatives designed to improve communication; 
Very satisfied: 6.6%; 13.9%; 
Somewhat satisfied: 27.2%; 44.9%; 
Somewhat dissatisfied: 16.4%; 17.2%; 
Very dissatisfied: 16.6%; 9.7%; 
Not aware of any such initiative: 23.2%; 10.0%; 
Do not know: 9.0%; 4.1%; 
Not checked: 1.1%; 0.3%.  

b. Initiatives designed to improve the performance management system; 
Very satisfied: 2.3%; 9.2%; 
Somewhat satisfied: 17.1%; 29.0%; 
Somewhat dissatisfied: 18.1%; 21.5%; 
Very dissatisfied: 30.2%; 27.4%; 
Not aware of any such initiative: 19.0%; 7.7%; 
Do not know: 11.6%; 3.9%; 
Not checked: 1.8%; 1.3%.  

c. Initiatives designed to improve training opportunities; 
Very satisfied: 14.1%; 25.1%; 
Somewhat satisfied: 37.9%; 48.2%; 
Somewhat dissatisfied: 15.1%; 12.6%; 
Very dissatisfied: 10.3%; 5.6%; 
Not aware of any such initiative: 12.4%; 4.6%; 
Do not know: 8.5%; 2.8%; 
Not checked: 1.7%; 1.0%.  

17. Are the numbers of supervisors and managers currently in your 
division/offices more than is needed, less than is needed, or an 
appropriate amount given the current workload? 

More than needed; 24.6%; 14.1%; 
An appropriate amount; 50.3%; 51.8%; 
Less than needed; 15.1%; 32.6%; 
Do not know; 9.2%; 1.3%; 
Not checked; 0.8%; 0.3%. 

18. Are the numbers of levels of supervisions currently in your 
division/offices more than is needed, less than is needed, or an 
appropriate amount given the current workload? 

More than needed; 26.2%; 13.9%; 
An appropriate amount; 58.6%; 69.2%; 
Less than needed; 7.4%; 14.6%; 
Do not know; 7.1%; 1.8%; 
Not checked; 0.8%; 0.5%. 

19. What is your current, direct supervisor's position or title? 

Branch Chief; 20.0%; 2.3%; 
Exam Manager; 7.0%; 2.6%; 
Assistant Director; 56.0%; 39.5%; 
Associate Director; 6.0%; 44.6%; 
Other; 10.4%; 10.8%; 
Not checked; 0.6%; 0.3%. 

20. To what extent do you agree or disagree with the following 
statements regarding your current direct supervisors? (Select one 
response per item):  

a. Is knowledgeable in the issue areas I conduct my work; 
Strongly Agree/Somewhat Agree: 83.9%; 88.2%; 
Neither Agree nor Disagree: 4.2%; 1.5%; 
Strongly Disagree/Somewhat disagree: 9.9%; 9.2%; 
Do Not Know: 1.0%; 0.5%; 
Not Checked: 1.0%; 0.5%.  

b. Has the skills and expertise to be an effective supervisor or 
manager; 
Strongly Agree/Somewhat Agree: 72.1%; 79.2%; 
Neither Agree nor Disagree: 7.5%; 4.1%; 
Strongly Disagree/Somewhat disagree: 18.4%; 14.9%; 
Do Not Know: 1.2%; 0.5%; 
Not Checked: 0.8; 1.3. 

c. Does a good job in sharing information; 
Strongly Agree/Somewhat Agree: 69.6%; 78.0%; 
Neither Agree nor Disagree: 9.0%; 7.4%; 
Strongly Disagree/Somewhat disagree: 19.4%; 13.3%; 
Do Not Know: 0.9%; 0.5%; 
Not Checked: 1.0%; 0.8%. 

d. Clearly defines goals and expectations; 
Strongly Agree/Somewhat Agree: 66.6%; 73.3%; 
Neither Agree nor Disagree: 10.2%; 9.2%; 
Strongly Disagree/Somewhat disagree: 21.6%; 15.9%; 
Do Not Know: 0.6%; 0.5%; 
Not Checked: 1.0%; 1.0%. 

e. Provides useful and constructive feedback; 
Strongly Agree/Somewhat Agree: 65.3%; 70.5%; 
Neither Agree nor Disagree: 11.9%; 9.5%; 
Strongly Disagree/Somewhat disagree: 20.1%; 16.7%; 
Do Not Know: 1.0%; 1.0%; 
Not Checked: 1.6%; 2.3%. 

f. Will listen to me if we have differing ideas or approaches; 
Strongly Agree/Somewhat Agree: 76.8%; 86.1%; 
Neither Agree nor Disagree: 7.0%; 2.8%; 
Strongly Disagree/Somewhat disagree: 13.4%; 8.5%; 
Do Not Know: 1.8%; 1.3%; 
Not Checked: 1.0%; 1.3%. 

g. Is willing to change his or her position when there is compelling 
information; 
Strongly Agree/Somewhat Agree: 73.5%; 82.1%; 
Neither Agree nor Disagree: 8.3%; 6.2%; 
Strongly Disagree/Somewhat disagree: 12.6%; 8.0%; 
Do Not Know: 4.3%; 2.8%; 
Not Checked: 1.4%; 1.0%.  

h. Gives me the flexibility I need to do my job effectively; 
Strongly Agree/Somewhat Agree: 83.2%; 88.7%; 
Neither Agree nor Disagree: 6.3%; 4.1%; 
Strongly Disagree/Somewhat disagree: 8.3%; 5.6%; 
Do Not Know: 0.7%; 0.5%; 
Not Checked: 1.5%; 1.0%.  

i. Spends too much time closely monitoring my work; 
Strongly Agree/Somewhat Agree: 10.3%; 10.8%; 
Neither Agree nor Disagree: 14.4%; 12.1%; 
Strongly Disagree/Somewhat disagree: 73.0%; 75.1%;
Do Not Know: 1.1%; 1.0%; 
Not Checked: 1.2%; 1.0%. 

21. If there are any other issues, details, or information concerning 
leadership and management at SEC that you would like us to know about, 
please use the space below to provide this information. 

We will not present detailed comments. 

22. To what extent do you agree or disagree with the following 
statements regarding how SEC management recognizes and rewards 
performance in your division/office? (Select one response per item):):  

a. Overall, senior officers deal effectively with poor performing 
supervisors and managers; 
Strongly Agree/Somewhat Agree: 5.3%; 24.9%; 
Neither Agree nor Disagree: 9.9%; 15.1%; 
Strongly Disagree/Somewhat disagree: 56.2%; 46.7%; 
Do Not Know: 28.4%; 13.3%; 
Not Checked: 0.1%; 0.  

b. Overall, supervisors and managers deal effectively with poor 
performing staff; 
Strongly Agree/Somewhat Agree: 9.6%; 28.5%; 
Neither Agree nor Disagree: 12.4%; 12.8%; 
Strongly Disagree/Somewhat disagree: 51.1%; 55.1%; 
Do Not Know: 26.6%; 3.1%; 
Not Checked: 0.3%; 0.5%.  

c. Supervisors and managers are quick to provide feedback to staff 
whose performance is unacceptable; 
Strongly Agree/Somewhat Agree: 9.5%; 36.9%; 
Neither Agree nor Disagree: 12.2%; 21.0%; 
Strongly Disagree/Somewhat disagree: 33.8%; 35.9%; 
Do Not Know: 43.5%; 5.9%; 
Not Checked: 1.0%; 0.3%.  

d. I know what is expected of me regarding my work performance; 
Strongly Agree/Somewhat Agree: 74.5%; 86.4%; 
Neither Agree nor Disagree: 10.3%; 4.6%; 
Strongly Disagree/Somewhat disagree: 14.2%; 8.5%; 
Do Not Know: 0.8%; 0.5%; 
Not Checked: 0.3%; 0.  

e. My direct supervisor provides sufficient performance feedback; 
Strongly Agree/Somewhat Agree: 67.9%; 74.9%; 
Neither Agree nor Disagree: 12.3%; 9.0%; 
Strongly Disagree/Somewhat disagree: 17.4%; 14.6%; 
Do Not Know: 1.8%; 1.0%; 
Not Checked: 0.7%; 0.5%.  

f. The criteria for rewarding staff are clearly defined; 
Strongly Agree/Somewhat Agree: 17.5%; 39.5%; 
Neither Agree nor Disagree: 14.0%; 16.7%; 
Strongly Disagree/Somewhat disagree: 63.8%; 42.6%; 
Do Not Know: 4.5%; 0.8%; 
Not Checked: 0.3%; 0.5%. 

g. The criteria for promoting staff are clearly defined; 
Strongly Agree/Somewhat Agree: 10.0%; 37.7%; 
Neither Agree nor Disagree: 13.6%; 18.5%; 
Strongly Disagree/Somewhat disagree: 68.9%; 41.3%; 
Do Not Know: 7.3%; 1.8%; 
Not Checked: 0.3%; 0.8%.  

h. For promotion opportunities, the quantity of reviews, exams, or 
cases is more important than their complexity or difficulty; 
Strongly Agree/Somewhat Agree: 19.7%; 11.5%; 
Neither Agree nor Disagree: 19.0%; 17.4%; 
Strongly Disagree/Somewhat disagree: 23.2%; 61.0%; 
Do Not Know: 37.4%; 9.5%; 
Not Checked: 0.8%; 0.5%.  

i. The opportunities in my division/office to get promoted into a 
management position are limited; 
Strongly Agree/Somewhat Agree: 78.7%; 83.1%; 
Neither Agree nor Disagree: 8.3%; 7.2%; 
Strongly Disagree/Somewhat disagree: 7.1%; 9.5%; 
Do Not Know: 5.5%; 0.3%; 
Not Checked: 0.5%; 0.  

j. Favoritism is typically not an issue in promotions; 
Strongly Agree/Somewhat Agree: 15.5%; 54.4%; 
Neither Agree nor Disagree: 15.5%; 11.8%; 
Strongly Disagree/Somewhat disagree: 46.2%; 29.7%; 
Do Not Know: 22.2%; 3.9%; 
Not Checked: 0.6%; 0.3%.  

k. Promotions go to those who most deserve it; 
Strongly Agree/Somewhat Agree: 19.7%; 57.7%; 
Neither Agree nor Disagree: 16.4%; 16.7%; 
Strongly Disagree/Somewhat disagree: 44.5%; 21.5%; 
Do Not Know: 18.5%; 3.1%; 
Not Checked: 1.0%; 1.0%.  

l. There is a clear link between my performance and recognition of it; 
Strongly Agree/Somewhat Agree: 37.6%; 60.5%; 
Neither Agree nor Disagree: 17.4%; 14.1%; 
Strongly Disagree/Somewhat disagree: 38.6%; 24.6%; 
Do Not Know: 5.5%; 0%; 
Not Checked: 1.0%; 0.8%.  

m. Current performance incentives are effective tools to motivate 
employees to perform well; 
Strongly Agree/Somewhat Agree: 12.0%; 14.9%; 
Neither Agree nor Disagree: 14.2%; 15.4%; 
Strongly Disagree/Somewhat disagree: 67.2%; 68.5%; 
Do Not Know: 5.9%; 0.8%; 
Not Checked: 0.7%; 0.5%.  

23. To what extent do you agree or disagree with the following 
statements regarding SEC's current performance management system? 
(Select one response per item):  

a. SEC's 5-point rating system allows for an accurate representation 
of my performance over the rating period; 
Strongly Agree/Somewhat Agree: 25.6%; 45.4%; 
Neither Agree nor Disagree: 15.7%; 11.8%; 
Strongly Disagree/Somewhat disagree: 52.4%; 41.3%; 
Do Not Know: 5.8%; 1.3%; 
Not Checked: 0.6%; 0.3%.  

b. How competencies are weighted accurately reflects the relative 
importance of my work; 
Strongly Agree/Somewhat Agree: 19.1%; 30.5%; 
Neither Agree nor Disagree: 19.3%; 17.2%; 
Strongly Disagree/Somewhat disagree: 50.4%; 49.7%; 
Do Not Know: 10.3%; 2.1%; 
Not Checked: 0.9%; 0.5%.  

c. SEC's performance management system uses relevant criteria to 
evaluate my performance; 
Strongly Agree/Somewhat Agree: 31.1%; 46.7%; 
Neither Agree nor Disagree: 18.0%; 12.8%; 
Strongly Disagree/Somewhat disagree: 44.0%; 39.2%; 
Do Not Know: 5.5%; 0.5%; 
Not Checked: 1.4%; 0.8%. 

d. SEC's performance management system allows supervisors and managers 
to have a meaningful discussion with their staff on how they are 
performing; 
Strongly Agree/Somewhat Agree: 32.6%; 52.6%; 
Neither Agree nor Disagree: 17.7%; 15.1%; 
Strongly Disagree/Somewhat disagree: 43.3%; 30.5%; 
Do Not Know: 5.1%; 0.5%; 
Not Checked: 1.2%; 1.3%.  

e. SEC's performance management system provides consistent standards 
for rewarding performance; 
Strongly Agree/Somewhat Agree: 16.4%; 36.4%; 
Neither Agree nor Disagree: 16.3%; 16.2%; 
Strongly Disagree/Somewhat disagree: 57.9%; 44.6%; 
Do Not Know: 8.6%; 2.6%; 
Not Checked: 0.9%; 0.3%. 

f. Changes need to be made to increase transparency in the process 
used to rate my performance; 
Strongly Agree/Somewhat Agree: 60.1%; 44.6%; 
Neither Agree nor Disagree: 19.2%; 26.2%; 
Strongly Disagree/Somewhat disagree: 13.3%; 26.9%; 
Do Not Know: 6.1%; 1.0%; 
Not Checked: 1.3%; 1.3%. 

g. Calibration of performance ratings by management improves fairness 
in the performance management system; 
Strongly Agree/Somewhat Agree: 20.2%; 50.3%; 
Neither Agree nor Disagree: 20.0%; 13.1%; 
Strongly Disagree/Somewhat disagree: 36.5%; 33.1%; 
Do Not Know: 22.1%; 3.3%; 
Not Checked: 1.3%; 0.3%.  

h. Employee performance appraisals are fair and appropriate under 
SEC's performance management system; 
Strongly Agree/Somewhat Agree: 20.1%; 51.8%; 
Neither Agree nor Disagree: 21.0%; 18.5%; 
Strongly Disagree/Somewhat disagree: 42.8%; 26.9%; 
Do Not Know: 14.8%; 1.5%; 
Not Checked: 1.2%; 1.3%. 

[End of table] 

24. if there are any other issues, details, or information concerning 
performance management and promotions at SEC that you would like us to 
know about, please use the space below to provide this information. 

We will not present detailed comments. 

25. To what extent do you agree or disagree with the following 
statements regarding different aspects of organizational culture and 
climate within your division/office? (Select one response per item):  

a. There is an atmosphere of trust in my division/office; 
Strongly Agree/Somewhat Agree: 45.1%; 59.0%; 
Neither Agree nor Disagree: 13.4%; 10.5%; 
Strongly Disagree/Somewhat disagree: 40.0%; 30.3%; 
Do Not Know: 1.1%; 0.3%; 
Not Checked: 0.4%; 0. 

b. Employee morale is generally high most of the time; 
Strongly Agree/Somewhat Agree: 29.8%; 38.2%; 
Neither Agree nor Disagree: 14.5%; 18.2%; 
Strongly Disagree/Somewhat disagree: 54.1%; 42.6%; 
Do Not Know: 1.2%; 0.8%; 
Not Checked: 0.4%; 0.3%. 

c. I have a voice in decisions that affect me and my work environment; 
Strongly Agree/Somewhat Agree: 38.3%; 63.1%; 
Neither Agree nor Disagree: 17.9%; 12.1%; 
Strongly Disagree/Somewhat disagree: 41.8%; 23.6%; 
Do Not Know: 1.3%; 0%; 
Not Checked: 0.8%; 1.3%. 

d. Management in my division/office has taken steps to improve 
employee morale; 
Strongly Agree/Somewhat Agree: 30.2%; 52.6%; 
Neither Agree nor Disagree: 18.5%; 16.4%; 
Strongly Disagree/Somewhat disagree: 44.7%; 30.3%; 
Do Not Know: 6.2%; 0.5%; 
Not Checked: 0.4%; 0.3%.  

e. Supervisors and managers in my division/office tolerate honest 
mistakes as learning experiences; 
Strongly Agree/Somewhat Agree: 56.4%; 75.1%; 
Neither Agree nor Disagree: 15.5%; 11.3%; 
Strongly Disagree/Somewhat disagree: 19.2%; 12.3%;
Do Not Know: 8.2%; 1.0%; 
Not Checked: 0.7%; 0.3%.  

f. Protecting investors is sometimes hampered by staff or managers who 
view firms as places they can potentially work at in the future; 
Strongly Agree/Somewhat Agree: 10.2%; 5.9%; 
Neither Agree nor Disagree: 7.0%; 4.9%; 
Strongly Disagree/Somewhat disagree: 71.5%; 86.4%; 
Do Not Know: 10.9%; 2.1%; 
Not Checked: 0.4%; 0.8%.  

g. There are clearly defined policies and procedures for doing my work; 
Strongly Agree/Somewhat Agree: 56.8%; 73.3%; 
Neither Agree nor Disagree: 17.9%; 12.6%; 
Strongly Disagree/Somewhat disagree: 24.1%; 13.3%; 
Do Not Know: 0.9%; 0.3%; 
Not Checked: 0.3%; 0.5%.  

h. Innovative ideas are encouraged in my division/office; 
Strongly Agree/Somewhat Agree: 50.1%; 67.4%; 
Neither Agree nor Disagree: 17.5%; 13.9%; 
Strongly Disagree/Somewhat disagree: 30.1%; 17.7%; 
Do Not Know: 1.4%; 0%; 
Not Checked: 0.9%; 1.0%. 

i. Fear of public scandals has made SEC overly cautious and risk-
averse; 
Strongly Agree/Somewhat Agree: 54.5%; 57.4%; 
Neither Agree nor Disagree: 16.7%; 14.6%; 
Strongly Disagree/Somewhat disagree: 21.0%; 24.6%; 
Do Not Know: 7.5%; 2.3%; 
Not Checked: 0.3%; 1.0%.  

j. In my view, the fear of being wrong makes supervisors and managers 
in my division/office reluctant to take a stand on important issues; 
Strongly Agree/Somewhat Agree: 49.3%; 41.5%; 
Neither Agree nor Disagree: 15.1%; 12.8%; 
Strongly Disagree/Somewhat disagree: 29.5%; 44.4%; 
Do Not Know: 5.8%; 0.8%; 
Not Checked: 0.3%; 0.5%.  

k. In my view, the fear of being wrong makes senior officers in my 
division/office reluctant to take a stand on important issues; 
Strongly Agree/Somewhat Agree: 46.7%; 44.1%; 
Neither Agree nor Disagree: 15.1%; 13.6%; 
Strongly Disagree/Somewhat disagree: 26.6%; 38.5%; 
Do Not Know: 10.9%; 3.6%; 
Not Checked: 0.8%; 0.3%.  

26. If there are any other issues, details, or information concerning 
the organizational culture or climate at the SEC or in your division/ 
office that you would like us to know about, please use the space 
below to provide this information. 

We will not present detailed comments. 

Survey Results of Senior Officers:  

1. To what extent do you agree or disagree with the following 
statements on recruitment, hiring and retention? (Select one response 
per item):  

a. My division/office is able to attract talented and qualified 
employees; 
Strongly Agree/Somewhat Agree: 92.2%; 
Neither Agree nor Disagree: 1.6%; 
Strongly Disagree/Somewhat disagree: 6.3%; 
Do Not Know: 0%; 
Not: Checked: 0. 

b. My division/office retains its most talented and qualified 
employees; 
Strongly Agree/Somewhat Agree: 84.4%; 
Neither Agree nor Disagree: 6.3%; 
Strongly Disagree/Somewhat disagree: 9.4%; 
Do Not Know: 0%; 
Not: Checked: 0. 

c. When new people start in jobs in my division/office, they are given 
enough guidance and training; 
Strongly Agree/Somewhat Agree: 71.9%; 
Neither Agree nor Disagree: 10.9%; 
Strongly Disagree/Somewhat disagree: 12.5%; 
Do Not Know: 1.6%; 
Not: Checked: 3.1%. 

d. Hiring is sometimes based more on personal connections than on 
substantive experience or qualifications; 
Strongly Agree/Somewhat Agree: 3.1%; 
Neither Agree nor Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 92.2%; 
Do Not Know: 0%; 
Not: Checked: 1.6%. 

e. Overall, SEC's Office of Human Resources provides timely support to 
my division/office; 
Strongly Agree/Somewhat Agree: 14.1%; 
Neither Agree nor Disagree: 17.2%; 
Strongly Disagree/Somewhat disagree: 64.1%; 
Do Not Know: 3.1%; 
Not: Checked: 1.6%. 

f. SEC's Office of Human Resources has the necessary expertise to 
assist in recruiting and hiring qualified employees; 
Strongly Agree/Somewhat Agree: 6.3%; 
Neither Agree nor Disagree: 15.6%; 
Strongly Disagree/Somewhat disagree: 71.9%; 
Do Not Know: 6.3%; 
Not: Checked: 0. 

2. To what extent do you agree or disagree with the following 
statements on training and development opportunities? (Select one 
response per item):  

a. SEC needs to invest more in the development of new staff; 
Strongly Agree/Somewhat Agree: 68.8%; 
Neither Agree nor Disagree: 23.4%; 
Strongly Disagree/Somewhat disagree: 6.3%; 
Do Not Know: 1.6%; 
Not Checked: 0. 

b. The training I have received over the past three years has provided 
me skills and experience to meet SEC's needs; 
Strongly Agree/Somewhat Agree: 65.6%; 
Neither Agree nor Disagree: 26.6%; 
Strongly Disagree/Somewhat disagree: 7.8%; 
Do Not Know: 0%; 
Not Checked: 0. 

c. Management in my division/office needs to do more to address skills 
gaps; 
Strongly Agree/Somewhat Agree: 51.6%; 
Neither Agree nor Disagree: 21.9%; 
Strongly Disagree/Somewhat disagree: 21.9%; 
Do Not Know: 1.6%; 
Not Checked: 3.1%. 

d. Over the past three years, SEC's leadership training has been 
effective in improving the management skills of supervisors and 
managers in my division/office; 
Strongly Agree/Somewhat Agree: 70.3%; 
Neither Agree nor Disagree: 15.6%; 
Strongly Disagree/Somewhat disagree: 4.7%; 
Do Not Know: 9.4%; 
Not Checked: 0. 

3. For those training opportunities that you have been involved with 
over the past three years, to what extent, if at all, have the 
following types of training provided information and knowledge that is 
directly relevant to your work? (Select one response per item):  

Training provided by the SEC University%; 
To a great extent: 15.6%; 
To a moderate extent: 43.8%; 
To a small extent: 28.1%; 
To no extent: 6.3%; 
No basis to judge: 6.3%; 
Do not know: 0%; 
Not checked: 0. 

Internal training delivered by SEC staff, but not through SEC 
University%; 
To a great extent: 26.6%; 
To a moderate extent: 57.8%; 
To a small extent: 9.4%; 
To no extent: 1.6%; 
No basis to judge: 3.1%; 
Do not know: 0%; 
Not checked: 1.6%. 

External training or conferences%; 
To a great extent: 12.5%; 
To a moderate extent: 43.8%; 
To a small extent: 28.1%; 
To no extent: 1.6%; 
No basis to judge: 12.5%; 
Do not know: 0%; 
Not checked: 1.6%. 

Computer-based training delivered by Internet%; 
To a great extent: 4.7%; 
To a moderate extent: 29.7%; 
To a small extent: 50.0%; 
To no extent: 9.4%; 
No basis to judge: 4.7%; 
Do not know: 0%; 
Not checked: 1.6%. 

4. If there are any other issues, details, or information concerning 
recruitment, training, staff development and resources that you would 
like us to know about, please use the space below to provide this 
information. 

We will not present detailed comments. 

5. To what extent do you agree or disagree with the following 
statements regarding communication within your division/office and 
between your division/office and other SEC offices and divisions? 
(Select one response per item):  

a. My division/office supports open, two-way communication between 
staff and management; 
Strongly Agree/Somewhat Agree: 93.8%; 
Neither Agree nor Disagree: 4.7%; 
Strongly Disagree/Somewhat disagree: 1.6%; 
Do Not Know: 0%; 
Not Checked: 0%. 

b. Information is adequately shared across groups in my 
division/office; 
Strongly Agree/Somewhat Agree: 81.3%; 
Neither Agree nor Disagree: 9.4%; 
Strongly Disagree/Somewhat disagree: 7.8%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

c. Communication across groups in my division/office has improved over 
the past three years; 
Strongly Agree/Somewhat Agree: 82.8%; 
Neither Agree nor Disagree: 9.4%; 
Strongly Disagree/Somewhat disagree: 7.8%; 
Do Not Know: 0%; 
Not Checked: 0%. 

d. Overall, information and knowledge are shared openly at all levels 
within my division/office; 
Strongly Agree/Somewhat Agree: 67.2%; 
Neither Agree nor Disagree: 15.6%; 
Strongly Disagree/Somewhat disagree: 17.2%; 
Do Not Know: 0%; 
Not Checked: 0%. 

e. In my division/office, communication between other offices and 
divisions (such as between OCIE and CorpFin) on work related matters 
is encouraged; 
Strongly Agree/Somewhat Agree: 93.8%; 
Neither Agree nor Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 3.1%; 
Do Not Know: 0%; 
Not Checked: 0%. 

7. To what extent do you agree or disagree with the following 
statements regarding the quality of management and leadership in your 
division/office. (Select one response per item):  

a. In my division/office, the roles and responsibilities of senior 
officers are clearly defined; 
Strongly Agree/Somewhat Agree: 82.8%; 
Neither Agree nor Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 14.1%; 
Do Not Know: 0%; 
Not Checked: 0%. 

b. In my division/office, the roles and responsibilities of non-senior 
officer supervisors and managers are clearly defined; 
Strongly Agree/Somewhat Agree: 90.6%; 
Neither Agree nor Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 4.7%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

c. Senior officers in my division/office are genuinely interested in 
the opinions of their employees; 
Strongly Agree/Somewhat Agree: 95.3%; 
Neither Agree nor Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 1.6%; 
Do Not Know: 0%; 
Not Checked: 0%. 

d. Non-senior officer supervisors and managers in my division/office 
are genuinely interested in the opinions of their staff; 
Strongly Agree/Somewhat Agree: 95.3%; 
Neither Agree nor Disagree: 1.6%; 
Strongly Disagree/Somewhat disagree: 1.6%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

e. 360 degree feedback is an effective way for employees to provide 
feedback on the performance of their supervisors; 
Strongly Agree/Somewhat Agree: 54.7%; 
Neither Agree nor Disagree: 17.2%; 
Strongly Disagree/Somewhat disagree: 20.3%; 
Do Not Know: 0%; 
Not Checked: 7.8%. 

f. Promotion to management is mostly based on technical skills; 
Strongly Agree/Somewhat Agree: 56.3%; 
Neither Agree nor Disagree: 28.1%; 
Strongly Disagree/Somewhat disagree: 15.6%; 
Do Not Know: 0%; 
Not Checked: 0%. 

g. Promotion to management is mostly based on the ability to manage 
people effectively; 
Strongly Agree/Somewhat Agree: 62.5%; 
Neither Agree nor Disagree: 21.9%; 
Strongly Disagree/Somewhat disagree: 15.6%; 
Do Not Know: 0%; 
Not Checked: 0%. 

h. There is not much incentive to get promoted into a management 
position because the salary increase is minimal; 
Strongly Agree/Somewhat Agree: 42.2%; 
Neither Agree nor Disagree: 10.9%; 
Strongly Disagree/Somewhat disagree: 42.2%; 
Do Not Know: 3.1%; 
Not Checked: 1.6%. 

i. Over the past 3 years, I have seen SEC staff leave due to being 
dissatisfied with a supervisor or manager; 
Strongly Agree/Somewhat Agree: 29.7%; 
Neither Agree nor Disagree: 12.5%; 
Strongly Disagree/Somewhat disagree: 37.5%; 
Do Not Know: 20.3%; 
Not Checked: 0%. 

8. Are the numbers of supervisors and managers currently in your 
division/office more than is needed, less than is needed, or an 
appropriate amount given the current workload? 

More than needed; 7.8%; 
An appropriate amount; 51.6%; 
Less than needed; 35.9%; 
Do not know; 3.1%; 
Not checked; 1.6%. 

9. Are the numbers of levels of supervisions currently in your 
division/office more than is needed, less than is needed, or an 
appropriate amount given the current workload? 

More than needed; 4.7%; 
An appropriate amount; 70.3%; 
Less than needed; 20.3%; 
Do not know; 3.1%; 
Not checked; 1.6%.  

10. If there are any other issues, details, or information concerning 
leadership and management at SEC that you would like us to know about, 
please use the space below to provide this information. 

We will not present detailed comments. 

11. To what extent do you agree or disagree with the following 
statements regarding how SEC management recognizes and rewards 
performance in your division/office? (Select one response per item):  

a. Overall, senior officers deal effectively with poor performing 
supervisors and managers; 
Strongly Agree/Somewhat Agree: 56.3%; 
Neither Agree or Disagree: 17.2%; 
Strongly Disagree/Somewhat disagree: 23.4%; 
Do Not Know: 3.1%; 
Not Checked: 0%. 

b. I know what is expected of me regarding my work performance; 
Strongly Agree/Somewhat Agree: 79.7%; 
Neither Agree or Disagree: 7.8%; 
Strongly Disagree/Somewhat disagree: 12.5%; 
Do Not Know: 0%; 
Not Checked: 0%. 

c. My direct manager provides sufficient performance feedback; 
Strongly Agree/Somewhat Agree: 60.9%; 
Neither Agree or Disagree: 18.8%; 
Strongly Disagree/Somewhat disagree: 15.6%; 
Do Not Know: 4.7%; 
Not Checked: 0%. 

d. The opportunities in my division/office to get promoted into a 
management position are limited; 
Strongly Agree/Somewhat Agree: 68.8%; 
Neither Agree or Disagree: 4.7%; 
Strongly Disagree/Somewhat disagree: 25%; 
Do Not Know: 1.6%; 
Not Checked: 0%. 

e. There is a clear link between my performance and recognition of it; 
Strongly Agree/Somewhat Agree: 59.4%; 
Neither Agree or Disagree: 20.3%; 
Strongly Disagree/Somewhat disagree: 18.8%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

f. Current performance incentives are effective tools to motivate 
employees to perform well; 
Strongly Agree/Somewhat Agree: 18.8%; 
Neither Agree or Disagree: 18.8%; 
Strongly Disagree/Somewhat disagree: 59.4%; 
Do Not Know: 1.6%; 
Not Checked: 1.6%. 

12. To what extent do you agree or disagree with the following 
statements regarding SEC's current performance management system? 
(Select one response per item):  

a. SEC's 5-point rating system allows for an accurate representation 
of my performance over the rating period; 
Strongly Agree/Somewhat Agree: 50.0%; 
Neither Agree or Disagree: 7.8%; 
Strongly Disagree/Somewhat disagree: 31.3%; 
Do Not Know: 10.9%; 
Not Checked: 0%. 

b. How competencies are weighted accurately reflects the relative 
importance of my work; 
Strongly Agree/Somewhat Agree: 32.8%; 
Neither Agree or Disagree: 20.3%; 
Strongly Disagree/Somewhat disagree: 34.4%; 
Do Not Know: 9.4%; 
Not Checked: 3.1%. 

c. How competencies are weighted accurately reflects the relative 
importance of my employees' work; 
Strongly Agree/Somewhat Agree: 31.3%; 
Neither Agree or Disagree: 15.6%; 
Strongly Disagree/Somewhat disagree: 46.9%; 
Do Not Know: 4.7%; 
Not Checked: 1.6%. 

d. SEC's performance management system uses relevant criteria to 
evaluate my performance; 
Strongly Agree/Somewhat Agree: 51.6%; 
Neither Agree or Disagree: 12.5%; 
Strongly Disagree/Somewhat disagree: 28.1%; 
Do Not Know: 6.3%; 
Not Checked: 1.6%. 

e. SEC's performance management system allows supervisors and managers 
to have a meaningful discussion with their staff on how they are 
performing; 
Strongly Agree/Somewhat Agree: 62.5%; 
Neither Agree or Disagree: 9.4%; 
Strongly Disagree/Somewhat disagree: 26.6%; 
Do Not Know: 1.6%; 
Not Checked: 0%. 

f. The time it takes me to develop, review, and formalize performance 
assessments under SEC's current performance management system is 
unreasonable; 
Strongly Agree/Somewhat Agree: 79.7%; 
Neither Agree or Disagree: 4.7%; 
Strongly Disagree/Somewhat disagree: 12.5%; 
Do Not Know: 3.1%; 
Not Checked: 0%. 

g. SEC's performance management system provides consistent standards 
for rewarding performance; 
Strongly Agree/Somewhat Agree: 43.8%; 
Neither Agree or Disagree: 25%; 
Strongly Disagree/Somewhat disagree: 29.7%; 
Do Not Know: 1.6%; 
Not Checked: 0. 

h. Changes need to be made to increase transparency in the process 
used to rate my performance; 
Strongly Agree/Somewhat Agree: 26.6%; 
Neither Agree or Disagree: 34.4%; 
Strongly Disagree/Somewhat disagree: 23.4%; 
Do Not Know: 14.1%; 
Not Checked: 1.6%. 

i. Calibration of performance ratings by management improves fairness 
in the performance management system; 
Strongly Agree/Somewhat Agree: 71.9%; 
Neither Agree or Disagree: 9.4%; 
Strongly Disagree/Somewhat disagree: 17.2%; 
Do Not Know: 1.6%; 
Not Checked: 0%. 

j. Employee performance appraisals are fair and appropriate under 
SEC's performance management system; 
Strongly Agree/Somewhat Agree: 70.3%; 
Neither Agree or Disagree: 17.2%; 
Strongly Disagree/Somewhat disagree: 10.9%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

13. If there are any other issues, details, or information concerning 
performance management and promotions at SEC that you would like us to 
know about, please use the space below to provide this information. 

We will not present detailed comments. 

14. To what extent do you agree or disagree with the following 
statements regarding different aspects of organizational culture and 
climate within your division/office? (Select one response per item):  

a. There is an atmosphere of trust in my division/office; 
Strongly Agree/Somewhat Agree: 73.4%; 
Neither Agree or Disagree: 7.8%; 
Strongly Disagree/Somewhat disagree: 17.2%; 
Do Not Know: 1.6%; 
Not Checked: 0%. 

b. Employee morale is generally high most of the time; 
Strongly Agree/Somewhat Agree: 54.7%; 
Neither Agree or Disagree: 20.3%; 
Strongly Disagree/Somewhat disagree: 25%; 
Do Not Know: 0%; 
Not Checked: 0%. 

c. I have a voice in decisions that affect me and my work environment; 
Strongly Agree/Somewhat Agree: 92.2%; 
Neither Agree or Disagree: 4.7%; 
Strongly Disagree/Somewhat disagree: 1.6%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

d. Senior officers in my division/office tolerate honest mistakes as 
learning experiences; 
Strongly Agree/Somewhat Agree: 90.6%; 
Neither Agree or Disagree: 7.8%; 
Strongly Disagree/Somewhat disagree: 0%; 
Do Not Know: 0%; 
Not Checked: 1.6%. 

e. Protecting investors is sometimes hampered by staff or managers who 
view firms as places they can potentially work at in the future; 
Strongly Agree/Somewhat Agree: 0%; 
Neither Agree or Disagree: 3.1%; 
Strongly Disagree/Somewhat disagree: 96.9%; 
Do Not Know: 0%; 
Not Checked: 0%. 

f. There are clearly defined policies and procedures for doing my work; 
Strongly Agree/Somewhat Agree: 81.3%; 
Neither Agree or Disagree: 12.5%; 
Strongly Disagree/Somewhat disagree: 6.3%; 
Do Not Know: 0%; 
Not Checked: 0%. 

g. Innovative ideas are encouraged in my division/office; 
Strongly Agree/Somewhat Agree: 92.2%; 
Neither Agree or Disagree: 4.7%; 
Strongly Disagree/Somewhat disagree: 3.1%; 
Do Not Know: 0%; 
Not Checked: 0%. 

h. Fear of public scandals has made SEC overly cautious and risk-
averse; 
Strongly Agree/Somewhat Agree: 62.5%; 
Neither Agree or Disagree: 12.5%; 
Strongly Disagree/Somewhat disagree: 25%; 
Do Not Know: 0%; 
Not Checked: 0%. 

i. In my view, the fear of being wrong makes supervisors and managers 
in my division/office reluctant to take a stand on important issues; 
Strongly Agree/Somewhat Agree: 21.9%; 
Neither Agree or Disagree: 12.5%; 
Strongly Disagree/Somewhat disagree: 62.5%; 
Do Not Know: 3.1%; 
Not Checked: 0%. 

j. In my view, the fear of being wrong makes non-senior officers and 
managers in my division/office reluctant to take a stand on important 
issues; 
Strongly Agree/Somewhat Agree: 29.7%; 
Neither Agree or Disagree: 17.2%; 
Strongly Disagree/Somewhat disagree: 53.1%; 
Do Not Know: 0%; 
Not Checked: 0%. 

15. If there are any other issues, details, or information concerning 
the organizational culture or climate at the SEC that you would like 
us to know about, please use the space below to provide this 
information. 

We will not present detailed comments.  

[End of section]  

Appendix III: Ratio of Staff to Supervisors and Senior Officers, 
Fiscal Years 2008-2012:  

Section 962 of the Dodd-Frank Act requires us to review whether there 
is "excessive number of low-level, mid-level, or senior-level 
managers." We did not find standards for evaluating "excessive" number 
of supervisors have not been established. Table 16 illustrates the 
ratio of supervisors to nonsupervisors. Table 17 illustrates the ratio 
of senior officers to nonsupervisors, and table 18 illustrates the 
ratio of senior officers to supervisors. 

Table 16: Ratio of Supervisors to Nonsupervisors (per every 100 
nonsupervisory staff), Fiscal Years 2008-2012:  

Division: Division of Corporation Finance; 
FY 08: 24.1; 
FY 09: 23.2; 
FY 10: 21.0; 
FY 11: 26.8; 
FY 12: 23.4. 

Division: Division of Investment Management; 
FY 08: 31.3; 
FY 09: 31.6; 
FY 10: 29.7; 
FY 11: 18.8; 
FY 12: 32.0. 

Division: Division of Economic and Risk Analysis; 
FY 08: [A]; 
FY 09: [A]; 
FY 10: 29.6; 
FY 11: 28.1; 
FY 12: 16.7. 

Division: Division of Trading and Markets; 
FY 08: 23.6; 
FY 09: 23.0; 
FY 10: 23.9; 
FY 11: 24.4; 
FY 12: 18.8. 

Division: Division of Enforcement; 
FY 08: 28.3; 
FY 09: 27.3; 
FY 10: 22.7; 
FY 11: 10.9; 
FY 12: 16.2. 

Division: Office of Compliance Inspections and Examinations; 
FY 08: 33.4; 
FY 09: 33.1; 
FY 10: 30.2; 
FY 11: 28.4; 
FY 12: 35.3. 

Source: GAO analysis of SEC data. 

[A] There are no data for Division of Economics and Risk Analysis in 
2008 and 2009 because the division was created in September 2009.  

[End of table]  

Table 17: Ratio of Senior Officers to Nonsupervisors (per every 100 
nonsupervisory staff), Fiscal Years 2008-2012:  

Division: Division of Corporation Finance; 
FY 08: 3.3; 
FY 09: 3.1; 
FY 10: 2.6; 
FY 11: 6.5; 
FY 12: 3.7. 

Division: Division of Investment Management; 
FY 08: 6.3; 
FY 09: 6.1; 
FY 10: 5.9; 
FY 11: 3.1; 
FY 12: 6.0. 

Division: Division of Economic and Risk Analysis; 
FY 08: [A]; 
FY 09: [A]; 
FY 10: 3.7; 
FY 11: 0; 
FY 12: 2.1. 

Division: Division of Trading and Markets; 
FY 08: 7.5; 
FY 09: 6.2; 
FY 10: 6.7; 
FY 11: 4.1; 
FY 12: 6.1. 

Division: Division of Enforcement; 
FY 08: 3.6; 
FY 09: 3.4; 
FY 10: 3.8; 
FY 11: 4.2; 
FY 12: 3.4. 

Division: Office of Compliance Inspections and Examinations; 
FY 08: 3.1; 
FY 09: 3.0; 
FY 10: 2.9; 
FY 11: 6.1; 
FY 12: 3.8. 

Source: GAO analysis of SEC data. 

[A] There are no data for Division of Economics and Risk Analysis in 
2008 and 2009 because the division was created in September 2009.  

[End of table]  

Table 18: Ratio of Senior Officers to Supervisors (per Every 100 
Supervisory Staff), Fiscal Years 2008-2012:  

Division: Division of Corporation Finance; 
FY 08: 13.5; 
FY 09: 13.2; 
FY 10: 12.3; 
FY 11: 24.3; 
FY 12: 15.8. 

Division: Division of Investment Management; 
FY 08: 20.0; 
FY 09: 19.4; 
FY 10: 20.0; 
FY 11: 16.7; 
FY 12: 18.8. 

Division: Division of Economic and Risk Analysis; 
FY 08: [A]; 
FY 09: [A]; 
FY 10: 12.5; 
FY 11: 0; 
FY 12: 12.5. 

Division: Division of Trading and Markets; 
FY 08: 32.0; 
FY 09: 26.9; 
FY 10: 28.1; 
FY 11: 16.7; 
FY 12: 32.3. 

Division: Division of Enforcement; 
FY 08: 12.6; 
FY 09: 12.3; 
FY 10: 16.9; 
FY 11: 38.1; 
FY 12: 21.2. 

Division: Office of Compliance Inspections and Examinations; 
FY 08: 9.4; 
FY 09: 9.1; 
FY 10: 9.5; 
FY 11: 21.3; 
FY 12: 10.7. 

Source: GAO analysis of SEC data. 

[A] There are no data for Division of Economics and Risk Analysis in 
2008 and 2009 because the division was created in September 2009.  

[End of table]  

[End of section]  

Appendix IV: Percentage of Staff Who Left SEC, Fiscal Years 2008-2012:  

Among its provisions, Section 962 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act requires us to review turnover rates 
within SEC subunits.[Footnote 63] While staff turnover rates could be 
used to identify potential areas for improvement and further develop 
current supervisors, officials from the Merit Systems Protection Board 
noted that turnover was not a good indicator of poor supervision for 
several reasons. For example, staff may leave to pursue opportunities 
with a different employer or a different career path, or for personal 
reasons. SEC officials also indicated that staff facing potential 
removal or termination often would resign or retire, rather than going 
through removal or termination. Tables 19 and 20 show the percentage 
of staff who left SEC from fiscal years 2008 through 2012 from 
headquarters and the 11 regional offices, respectively. Table 21 shows 
the total number of staff who left SEC during the same period. 

Table 19: Headquarters Staff Who Left SEC, Fiscal Years 2008-2012:  

Reason for separation: Retirement;  

Employee category: Nonsupervisors; 
FY 08: 
Percentage separated: 0.8%; 
Total staff: 900; 
FY 09: 
Percentage separated: 0.2%; 
Total staff: 937; 
FY 10: 
Percentage separated: 1.2%; 
Total staff: 1,008; 
FY 11: 
Percentage separated: 1.8%; 
Total staff: 914; 
FY 12: 
Percentage separated: 0.6%; 
Total staff: 1,027. 

Employee category: Supervisors; 
FY 08: 
Percentage separated: 1.5%; 
Total staff: 196; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 199; 
FY 10: 
Percentage separated: 2.2%; 
Total staff: 224; 
FY 11: 
Percentage separated: 2.7%; 
Total staff: 183; 
FY 12
Percentage separated: 1.3%; 
Total staff: 234. 

Employee category: Senior officers; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 41; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 40; 
FY 10: 
Percentage separated: 8.7%; 
Total staff: 46; 
FY 11: 
Percentage separated: 11.1%; 
Total staff: 45; 
FY 12: 
Percentage separated: 2.0%; 
Total staff: 51. 

Reason for separation: Resignation;  

Employee category: Nonsupervisors; 
FY 08: 
Percentage separated: 4.4%; 
Total staff: 900; 
FY 09: 
Percentage separated: 1.8%; 
Total staff: 937; 
FY 10: 
Percentage separated: 2.1%; 
Total staff: 1,008; 
FY 11:
Percentage separated: 2.7%; 
Total staff: 914; 
FY 12:
Percentage separated: 4.0%; 
Total staff: 1027. 

Employee category: Supervisors; 
FY 08: 
Percentage separated: 3.1%; 
Total staff: 196; 
FY 09: 
Percentage separated: 1.5%; 
Total staff: 199; 
FY 10: 
Percentage separated: 1.3%; 
Total staff: 224; 
FY 11: 
Percentage separated: 3.8%; 
Total staff: 183; 
FY 12: 
Percentage separated: 2.1%; 
Total staff: 234. 

Employee category: Senior officers; 
FY 08: 
Percentage separated: 4.9%; 
Total staff: 41; 
FY 09: 
Percentage separated: 12.5%; 
Total staff: 40; 
FY 10: 
Percentage separated: 19.6%; 
Total staff: 46; 
FY 11: 
Percentage separated: 8.9%; 
Total staff: 45; 
FY 12: 
Percentage separated: 5.9%; 
Total staff: 51. 

Reason for separation: Removal or termination;  

Employee category: Nonsupervisors; 
FY 08: 
Percentage separated: 0.4%; 
Total staff: 900; 
FY 09: 
Percentage separated: 0.6%; 
Total staff: 937; 
FY 10: 
Percentage separated: 1.0%; 
Total staff: 1,008; 
FY 11: 
Percentage separated: 0.9%; 
Total staff: 914; 
FY 12: 
Percentage separated: 0.7%; 
Total staff: 1027. 

Employee category: Supervisors; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 196; 
FY 00: 
Percentage separated: 0.5%; 
Total staff: 199; 
FY 10: 
Percentage separated: 0.0%; 
Total staff: 224; 
FY 11: 
Percentage separated: 1.1%; 
Total staff: 183; 
FY 12: 
Percentage separated: 0.9%; 
Total staff: 234. 

Employee category: Senior officers; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 41; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 40; 
FY 10: 
Percentage separated: 0.0%; 
Total staff: 46; 
FY 11: 
Percentage separated: 2.2%; 
Total staff: 45; 
FY 12: 
Percentage separated: 3.9%; 
Total staff: 51. 

Source: GAO analysis of SEC data.  

[End of table]  

Table 20: Staff Who Left SEC from 11 Regional Offices, Fiscal Years 
2008-2012:  

Reason for separation: Retirement;  

Nonsupervisors; 
FY 08: 
Percentage separated: 0.8%; 
Total staff: 927; 
FY 09: 
Percentage separated: 0.4%; 
Total staff: 954; 
FY 10: 
Percentage separated: 1.1%; 
Total staff: 981; 
FY 11: 
Percentage separated: 1.2%; 
Total staff: 861; 
FY 12: 
Percentage separated: 1.0%; 
Total staff: 987. 

Supervisors; 
FY 08: 
Percentage separated: 3.7%; 
Total staff: 191; 
FY 09: 
Percentage separated: 1.5%; 
Total staff: 197; 
FY 10: 
Percentage separated: 5.0%; 
Total staff: 221; 
FY 11: 
Percentage separated: 1.8%; 
Total staff: 168; 
FY 12: 
Percentage separated: 1.7%; 
Total staff: 237. 

Senior officers; 
FY 08: 
Percentage separated: 4.2%; 
Total staff: 24; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 23; 
FY 10: 
Percentage separated: 8.0%; 
Total staff: 25; 
FY 11: 
Percentage separated: 4.8%; 
Total staff: 42; 
FY 12: 
Percentage separated: 3.7%; 
Total staff: 27. 

Reason for separation: Resignation;  

Nonsupervisors; 
FY 08: 
Percentage separated: 3.2%; 
Total staff: 927; 
FY 09: 
Percentage separated: 1.2%; 
Total staff: 954; 
FY 10: 
Percentage separated: 1.5%; 
Total staff: 981; 
FY 11: 
Percentage separated: 2.8%; 
Total staff: 861; 
FY 12: 
Percentage separated: 3.4%; 
Total staff: 987. 

Supervisors; 
FY 08: 
Percentage separated: 1.6%; 
Total staff: 191; 
FY 09: 
Percentage separated: 2.0%; 
Total staff: 197; 
FY 10: 
Percentage separated: 0.9%; 
Total staff: 221; 
FY 11: 
Percentage separated: 4.2%; 
Total staff: 168; 
FY 12: 
Percentage separated: 1.7%; 
Total staff: 237. 

Senior officers; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 24; 
FY 09: 
Percentage separated: 8.7%; 
Total staff: 23; 
FY 10: 
Percentage separated: 0.0%; 
Total staff: 25; 
FY 11: 
Percentage separated: 2.4%; 
Total staff: 42; 
FY 12: 
Percentage separated: 3.7%; 
Total staff: 27. 

Reason for separation: Removal or termination;  

Nonsupervisors; 
FY 08: 
Percentage separated: 0.5%; 
Total staff: 927; 
FY 09: 
Percentage separated: 0.1%; 
Total staff: 954; 
FY 10: 
Percentage separated: 0.3%; 
Total staff: 981; 
FY 11: 
Percentage separated: 0.1%; 
Total staff: 861; 
FY 12: 
Percentage separated: 0.8%; 
Total staff: 987. 

Supervisors; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 191; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 197; 
FY 10: 
Percentage separated: 0.0%; 
Total staff: 221; 
FY 11: 
Percentage separated: 0.6%; 
Total staff: 168; 
FY 12: 
Percentage separated: 0.4%; 
Total staff: 237. 

Senior officers; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 24; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 23; 
FY 10: 
Percentage separated: 4.0%; 
Total staff: 25; 
FY 11: 
Percentage separated: 0.0%; 
Total staff: 42; 
FY 12: 
Percentage separated: 0.0%; 
Total staff: 27. 

Source: GAO analysis of SEC data.  

[End of table]  

Table 21: All Staff Who Left SEC, Fiscal Years 2008-2012:  

Reason for separation: Retirement; 
Nonsupervisors; 
FY 08: 
Percentage separated: 0.8%; 
Total staff: 1,827; 
FY 09: 
Percentage separated: 0.3%; 
Total staff: 1,891; 
FY 10: 
Percentage separated: 1.2%; 
Total staff: 1,989; 
FY 11: 
Percentage separated: 1.5%; 
Total staff: 1,775; 
FY 12: 
Percentage separated: 0.8%; 
Total staff: 2,014. 

Supervisors; 
FY 08: 
Percentage separated: 2.6%; 
Total staff: 387; 
FY 09: 
Percentage separated: 0.8%; 
Total staff: 396; 
FY 10: 
Percentage separated: 3.6%; 
Total staff: 445; 
FY 11: 
Percentage separated: 2.3%; 
Total staff: 351; 
FY 12: 
Percentage separated: 1.5%; 
Total staff: 471. 

Senior officers; 
FY 08: 
Percentage separated: 1.5%; 
Total staff: 65; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 63; 
FY 10: 
Percentage separated: 8.5%; 
Total staff: 71; 
FY 11: 
Percentage separated: 8.0%; 
Total staff: 87; 
FY 12: 
Percentage separated: 2.6%; 
Total staff: 78. 

Reason for separation: Resignation;  

Nonsupervisors; 
FY 08: 
Percentage separated: 3.8%; 
Total staff: 1,827; 
FY 09: 
Percentage separated: 1.5%; 
Total staff: 1,891; 
FY 10: 
Percentage separated: 1.8%; 
Total staff: 1,989; 
FY 11: 
Percentage separated: 2.8%; 
Total staff: 1,775; 
FY 12: 
Percentage separated: 3.7%; 
Total staff: 2014. 

Supervisors; 
FY 08: 
Percentage separated: 2.3%; 
Total staff: 387; 
FY 09: 
Percentage separated: 1.8%; 
Total staff: 396; 
FY 10: 
Percentage separated: 1.1%; 
Total staff: 445; 
FY 11: 
Percentage separated: 4.0%; 
Total staff: 351; 
FY 12: 
Percentage separated: 1.9%; 
Total staff: 471. 

Senior officers; 
FY 08: 
Percentage separated: 3.1%; 
Total staff: 65; 
FY 09: 
Percentage separated: 11.1%; 
Total staff: 63; 
FY 10: 
Percentage separated: 12.7%; 
Total staff: 71; 
FY 11: 
Percentage separated: 5.7%; 
Total staff: 87; 
FY 12: 
Percentage separated: 5.1%; 
Total staff: 78. 

Reason for separation: Removal or termination;  

Nonsupervisors; 
FY 08: 
Percentage separated: 0.5%; 
Total staff: 1,827; 
FY 09: 
Percentage separated: 0.4%; 
Total staff: 1,891; 
FY 10: 
Percentage separated: 0.7%; 
Total staff: 1,989; 
FY 11: 
Percentage separated: 0.5%; 
Total staff: 1,775; 
FY 12: 
Percentage separated: 0.7%; 
Total staff: 2,014. 

Supervisors; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 387; 
FY 09: 
Percentage separated: 0.3%; 
Total staff: 396; 
FY 10: 
Percentage separated: 0.0%; 
Total staff: 445; 
FY 11: 
Percentage separated: 0.9%; 
Total staff: 351; 
FY 12: 
Percentage separated: 0.6%; 
Total staff: 471. 

Senior officers; 
FY 08: 
Percentage separated: 0.0%; 
Total staff: 65; 
FY 09: 
Percentage separated: 0.0%; 
Total staff: 63; 
FY 10: 
Percentage separated: 1.4%; 
Total staff: 71; 
FY 11: 
Percentage separated: 1.1%; 
Total staff: 87; 
FY 12: 
Percentage separated: 2.6%; 
Total staff: 78. 

Source: GAO analysis of SEC data.  

[End of table]  

[End of section]  

Appendix V: Comments from the Securities and Exchange Commission:  

United States Securities and Exchange Commission: 
The Chair: 
Washington, D.C. 20549:  

July 3, 2013:  

A. Nicole Clowers:
Director: 
Financial Markets and Community Investment: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Clowers:  

Thank you for the opportunity to respond to the draft report, 
"Securities and Exchange Commission: Improving Personnel Management Is 
Critical for Agency's Effectiveness (GAO-13-621)." We believe that the 
Government Accountability Office's (GAO) study of the Securities
and Exchange Commission's personnel management practices and 
organizational culture contains useful recommendations to help 
strengthen personnel management at the SEC. We agree with the seven 
recommendations and will continue our efforts to address them.  

We are pleased that the GAO acknowledges the steps the SEC has taken 
to address its organizational culture and personnel management 
challenges. The agency's staff and leaders remain committed to 
building upon and sustaining an organizational culture where innovation,
collaboration, and transparency are encouraged. In addition, we 
believe our efforts in enhancing our personnel management programs 
have yielded significant results. We recognize that we still have work 
to do in these areas and are committed to ensuring that progress 
continues.  

As mentioned in the report, the SEC has taken steps toward identifying 
and addressing its workforce competency gaps. The most recent progress 
in this area includes the establishment of a workforce and succession 
planning function, which is staffed by three subject matter experts
within the Office of Human Resources (OHR). This team's primary 
responsibility is to provide tools, systems, and reports for analyzing 
the agency's workforce supply and demand to determine gaps and risks. 
In addition, the team will coordinate all workforce succession 
planning inquiries and activities across the agency and develop and 
disseminate succession planning strategies. OHR anticipates fully 
operationalizing this function in FY14.  

The report also acknowledges the SEC's progress in the implementation 
of its performance management system. We agree that the system 
reflects the characteristics of an effective system. The system has 
been fully validated and the competencies used in the system were the 
result of an SEC-wide study that included all employees. As a result, 
we successfully implemented pay for performance for non-bargaining 
unit employees during this past rating process of assessing the impact 
of the new system on non-bargaining unit employees and expect 
favorable outcomes.  

We acknowledge that improvements can be made with the performance 
management system. By fully implementing the performance management 
system, offering additional training opportunities to managers, and 
offering information sessions to employees, we will effectively manage 
the agency's full transition into the new system. As the report 
mentions, the SEC currently is engaged with the National Treasury 
Employees Union (NTEU) on the appraisal process for bargaining unit 
employees. We are confident that we will soon reach agreement with
NTEU on this issue. This will allow the agency to experience the full 
and positive impact of the system's design.  

Meeting the challenges related to improving intra-agency communication 
is a top priority for the SEC, and we have taken meaningful steps 
toward overcoming these longstanding barriers. In addition to the 
positive examples included in the report, we also highlight the
following:  

* The Office of Compliance, Inspections and Examinations' (OCIE) 
Office of Chief Counsel (OCC) serves as a liaison between examination 
staff and the SEC's divisions. The OCC regularly communicates with the 
divisions of Enforcement, Trading and Markets (TM), Investment 
Management (IM International Affairs (OIA), on various issues, often 
making contact with the divisions on behalf of examiners or vice 
versa. For example, the Aberrational Performance Inquiry - an 
initiative to combat hedge fund fraud by identifying abnormal
investment performance - involved significant collaboration between 
Enforcement, OCIE, alA, and the Division of Economic and Risk Analysis 
(DERA); 

* Every division and several offices have dedicated enforcement 
liaisons who communicate with Enforcement staff on a regular basis 
regarding ongoing investigations and enforcement recommendations. In 
addition, TM has a designated OCIE liaison. Recently, OCIE's OCC hired 
two staff members whose duties include being a liaison to TM and IM; 

* OCIE has formed nine specialized working groups in an effort to 
focus on key industry risk areas in the financial markets. Over 600 
staff participate in the specialized working groups from all regional 
offices and the SEC's home office, including staff from IM, TM, the 
Office of the Chief Accountant, the Office of Credit Ratings, the 
Office of Investor Education and Advocacy, CF, DERA, and several areas 
within Enforcement, including its Office of Market Intelligence, Asset 
Management Unit, Structured and New Products Unit, and Market Abuse 
Unit. Through such broad participation, these working groups 
facilitate the sharing of information on key risk areas and industry 
trends across many divisions and offices of the SEC.  

* The SEC establishes cross-divisional working groups for the economic 
analysis of each rule being written.  

* The SEC created the Internal College of Supervisors, a monthly 
meeting with staff across the agency who deal in any way with 
supervision of large broker-dealers. Organized by TM, staff from most 
divisions attend and report on relevant activities over the last month. 

* The Office of the Chief Operating Officer and the Offices of the 
Managing Executives for the divisions and offices regularly 
communicate and coordinate on initiatives impacting the agency as a 
whole, including topics such as technology, leasing, budgeting, and 
the Tips, Complaints and Referrals program. Enforcement and OCIE also 
have added a shared Regional Operations Liaison to assist in 
communicating and coordinating with the 11 regional offices on SEC 
initiatives and business operations. Finally, the SEC has added an 
Assistant Regional Director of Operations in each regional office to
improve communication and consistency across the agency as a whole.  

As the report states, "both SEC staff and external stakeholders have 
started to see positive effects from the recent efforts to bolster 
communication and collaboration." We appreciate this acknowledgment 
and will continue to leverage these results in our continuous
improvement efforts.  

In addition, OHR has prioritized the development of an HR 
Accountability System and Plan. The most recent progress in this area 
includes directing an SEC staff member with subject matter expertise 
to begin work on this effort. OHR has developed key milestones and
deliverables in anticipation of full implementation by the end of this 
calendar year. Once implemented, the system will specifIcally address 
the concerns cited in the report regarding the alignment of human 
capital practices to SEC strategic goals.  

Thank you for the consideration that you and your staff have shown our 
agency. We remain committed to investing time and resources to improve 
the organizational culture and personnel management at the SEC. We are 
very confident that the efforts underway, once fully implemented, will 
further strengthen the areas cited in the report while continuing to 
provide results in the identified areas of success.  

If you have any questions or would like to further discuss this 
response, please contact Lacey Dingman, Director, Office of Human 
Resources, at (202) 551-7500.  

Sincerely,  

Signed by:  

Mary Jo White: 
Chair:  

[End of section]  

Appendix VI: GAO Contact and Staff Acknowledgments:  

GAO Contact:  

A. Nicole Clowers, (202) 512-8678 or clowersa@gao.gov:  

Staff Acknowledgments:  

In addition to the contact above, Triana McNeil (Assistant Director), 
Carl Barden, Bethany Benitez, Pamela Davidson, Simin Ho, Chir-Jen 
Huang, Catherine Hurley, Stuart Kaufman, Jonathan Kucskar, Tarek 
Mahmassani, Marc Molino, and Barbara Roesmann made key contributions 
to this report. 

[End of section]  

Footnotes:  

[1] Pub. L. No. 111-203, 124 Stat. 1376 (2010). 

[2] See GAO, Securities and Exchange Commission: Human Capital 
Challenges Require Management Attention, [hyperlink, 
http://www.gao.gov/products/GAO-01-947] (Washington, D.C.: Sept. 17, 
2001); Securities and Exchange Commission: Human Capital Survey, 
[hyperlink, http://www.gao.gov/products/GAO-05-118R] (Washington, 
D.C.: Nov. 10, 2004); Securities and Exchange Commission: Some 
Progress Made on Strategic Human Capital Management, [hyperlink, 
http://www.gao.gov/products/GAO-06-86] (Washington, D.C.: Jan. 10, 
2006); Financial Regulators: Agencies Have Implemented Key Performance 
Management Practices, but Opportunities for Improvement Exist, 
[hyperlink, http://www.gao.gov/products/GAO-07-678] (Washington, D.C.: 
Jun. 18, 2007); and Securities and Exchange Commission: Greater 
Attention Needed to Enhance Communication and Utilization of Resources 
in the Division of Enforcement, [hyperlink, 
http://www.gao.gov/products/GAO-09-358] (Washington, D.C.: Mar. 31, 
2009). Also see SEC, Office of Inspector General, Report on 
Enforcement Performance Management, OIG-423 (Washington, D.C.: Feb. 8, 
2007); Investigation of Failure of the SEC to Uncover Bernard Madoff's 
Ponzi Scheme, public version, OIG-509 (Washington, D.C.: Aug. 31, 
2009); Program Improvements Needed within the SEC's Division of 
Enforcement, OIG-467 (Washington, D.C.: Sept. 29, 2009); Investigation 
of the SEC's Response to Concerns Regarding Robert Allen Stanford's 
Alleged Ponzi Scheme, public version,OIG-526 (Washington, D.C.: Mar. 
31, 2010); and OCIE Regional Offices' Referrals to Enforcement, public 
version, OIG-493 (Washington, D.C.: Mar. 30, 2011). See Boston 
Consulting Group, U.S. Securities and Exchange Commission: 
Organizational Study and Reform (Washington, D.C.: Mar. 2011); and 
Robert Tobias, Evaluation of the U.S. Securities and Exchange 
Commission's Evidence Based Performance Management System (Washington, 
D.C.: June 1, 2012).  

[3] For our most recent high-risk report, see GAO, High-Risk Series: 
An Update, [hyperlink, http://www.gao.gov/products/GAO-13-283] 
(Washington, D.C.: Feb. 2013). 

[4] Pub. L. No. 111-203, § 962, 124 Stat. 1376, 1908-09 (2010). 

[5] Organizational culture is the underlying assumptions, beliefs, 
values, attitudes, and expectations shared by an organization's 
members that affect their behavior and the behavior of the 
organization as a whole.  

[6] Human Resources Management in Agencies, HCAAF and HCAAF Systems, 
Standards, and Metrics, 73 Fed. Reg. 23012, 23027 (Apr. 28, 2008) 
(codified at 5 C.F.R. § 250.202 (2012)); GAO, Organizational 
Transformation: Implementing Chief Operating Officer/Chief Management 
Officer Positions in Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-08-34] (Washington, D.C.: Nov. 1, 
2007); Human Capital: Key Principles for Effective Workforce Planning, 
[hyperlink, http://www.gao.gov/products/GAO-04-39] (Washington, D.C.: 
Dec. 11, 2003); Results-Oriented Cultures: Modern Performance 
Management Systems Are Needed to Effectively Support Pay for 
Performance, [hyperlink, http://www.gao.gov/products/GAO-03-612T] 
(Washington, D.C.: Apr. 1, 2003); Human Capital: DOD Needs to Improve 
Implementation of and Address Employee Concerns about its National 
Security Personnel System, [hyperlink, 
http://www.gao.gov/products/GAO-08-773] (Washington, D.C.: Sept. 10, 
2008); Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005); Managing Key Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012); and Standards for Internal Control in the Federal Government, 
AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999). 

[7] On June 6, 2013, SEC renamed the Division of Risk, Strategy, and 
Financial Innovation to the Division of Economic and Risk Analysis 
(DERA). 

[8] For the purposes of our surveys, (1) nonsupervisory staff are 
employees in SEC's pay plan grades SK 12-16 for the Division of 
Enforcement, and SK 12, 13, 14, and 16 for the remaining four 
divisions and OCIE; (2) supervisors are employees in SEC's pay plan 
grades SK 17 for the Division of Enforcement, and SK 15 and 17 for the 
other divisions and OCIE; and (3) senior officers are employees in 
SEC's pay plan grades SO 1-3. See the background section of this 
report for more information on the organizational structure of SEC. 

[9] According to SEC data, this figure captures the number of staff 
who were employed as of September 30, 2012.  

[10] OPM's Federal Employee Viewpoint Survey is a tool that measures 
employees' perceptions of whether, and to what extent, conditions 
characterizing successful organizations are present in their agencies. 
Survey results provide valuable insight into the challenges agency 
leaders face in ensuring the government has an effective civilian 
workforce and how well they are responding. The 2012 Federal Employee 
Viewpoint Survey included employees from 82 agencies (constituting 97 
percent of executive branch agencies). 

[11] Pub. L. No. 107-123, § 8, 115 Stat. 2390, 2397-99 (2002).  

[12] Under SEC's system, a rating of 5 is defined as greatly exceeds 
expectations, 4 exceeds expectations, 3 meets expectations, 2 needs 
improvement, and 1 is unacceptable. 

[13] There are slight differences in how ratings are calculated for 
employees covered by the bargaining and those not covered by the unit. 
For bargaining unit employees, scores for objectives have more weight 
than the scores for standards when the overall average scores are 
calculated. For nonbargaining unit employees, the objectives and 
standards scores are weighed equally when calculating the overall 
rating.  

[14] On October 19, 2006, the Federal Services Impasse Panel ruled on 
Case No. 06 FSIP 54, In the Matter of SEC and the National Treasury 
Employees Union (the SEC employees' union). Several provisions in the 
panel decision related to SEC's performance management system, 
including a redesign of the system to include five levels of ratings. 
In response to the panel decision, SEC developed and implemented the 
Evidence-Based Performance Management System.  

[15] Human Resources Management in Agencies, HCAAF and HCAAF Systems, 
Standards, and Metrics, 73 Fed. Reg. 23012, 23027 (Apr. 28, 2008) 
(codified at 5 C.F.R. § 250.202 (2012)). 

[16] In a previous report, we focused on determining whether the 
Federal Aviation Administration's (FAA) culture affected its 
acquisitions. For the analysis, we drew extensively on studies by FAA 
and other organizations, surveyed FAA employees, and reviewed studies 
on organizational change and culture in the public and private 
sectors. In describing criteria for organizational culture, we noted 
that research has shown that in organizations with a more constructive 
culture, employees exhibit a stronger commitment to (1) mission focus 
(pursuing goals that define the best course of action for an 
organization); (2) accountability (empowering employees and holding 
them responsible for their decisions and actions); (3) coordination 
(involving other employees in decisions affecting them, resolving 
differences collaboratively, and cooperating across organizational 
lines); and (4) adaptability (accepting new approaches and responding 
positively to demands and opportunities posed from within and outside 
of the organization). We found FAA's acquisitions were impaired 
because employees acted in ways that did not reflect a strong 
commitment to mission focus, accountability, coordination, and 
adaptability. See GAO, Aviation Acquisition: A Comprehensive Strategy 
Is Needed for Cultural Change at FAA, [hyperlink, 
http://www.gao.gov/products/GAO/RCED-96-159] (Washington, D.C.: Aug. 
22, 1996). 

[17] [hyperlink, http://www.gao.gov/products/GAO-01-947]. 

[18] First issued in 2003, the Partnership for Public Service uses 
data from OPM's Federal Employee Viewpoint Survey to rank agencies and 
their subcomponents according to a Best Places to Work index score. 
The 2012 rankings draw on responses from nearly 700,000 civil servants 
to produce a detailed view of employee satisfaction and commitment 
across 362 federal agencies and subcomponents. Agencies and 
subcomponents not only are measured on overall employee satisfaction, 
but are scored in 10 workplace categories, such as effective 
leadership, employee skills/mission match, pay, teamwork, and 
work/life balance. 

[19] According to the Partnership for Public Service analysis, the 
government-wide satisfaction and commitment score in 2012 has dropped 
to the lowest point since rankings were first published in 2003. The 
declining job satisfaction levels across the federal government come 
during turbulent times, with employees feeling the effects of a 2-and 
1/2 year pay freeze, hiring slowdowns, and budget constraints.  

[20] Of the staff and supervisors who responded to our survey, 32 
percent had not contacted employees in the division of Corporation 
Finance, 40 percent had not contacted employees in Investment 
Management, 37 percent had not contacted employees in Trading and 
Markets, and 50 percent had not contacted employees in Economic and 
Risk Analysis. SEC employees contacted the Division of Enforcement 
more frequently, with 19 percent of the respondents saying that they 
had not contacted Enforcement. SEC officials explained that there are 
many projects for which communication across divisions might not be 
necessary, and that this is partly why a sizable percentage of 
employees had not contacted employees in other divisions.  

[21] According to results from OPM's 2012 Federal Employee Viewpoint 
Survey, which surveyed employees from 82 federal agencies 
(constituting 97 percent of executive branch agencies), 53.3 percent 
of employees responding to the survey provided a positive response 
(agree or strongly agree) to the statement that managers promote 
communication among different work units, about 23.0 percent provided 
a neutral response (neither agree nor disagree), and 23.8 percent 
provided a negative response (disagree or strongly disagree). 

[22] OIG-467. 

[23] See OIG-493. According to SEC officials, SEC has addressed the 
recommendation in this report and now has committees for discussing 
referrals.  

[24] See Boston Consulting Group, U.S. Securities and Exchange 
Commission: Organizational Study and Reform.  

[25] [hyperlink, http://www.gao.gov/products/GAO-09-358].  

[26] OIG-526. 

[27] Based on information gathered from officials at four 
organizations with COO-type positions and a forum with individuals 
with experience in business transformation, we reported in November 
2007 that a senior-level position, such as a COO, can provide 
sustained management attention essential for addressing key 
stewardship responsibilities in an integrated manner while helping to 
facilitate the business transformation process within an agency. 
Responsibilities under a COO could include, among others, strategic 
planning, communications and information resources management, human 
capital strategy, and change management. See [hyperlink, 
http://www.gao.gov/products/GAO-08-34]. 

[28] Section 962 of Dodd Frank Act required us to review the ratio of 
management to staff, including whether there are "excessive" numbers 
of low-level, mid-level, or senior-level managers. Pub. L. No. 111-
203, § 962(b)(1)(G), 124 Stat. 1376, 1909 (2010). Appendix III 
provides additional information on the ratio of management to staff 
from 2008 to 2012. In addition, the act required us to review turnover 
rates within SEC subunits. § 962(b)(1)(F). While staff turnover rates 
could be used to identify potential areas for improvement and further 
develop current supervisors, officials from the Merit Systems 
Protection Board noted that turnover was not a good indicator of poor 
supervision for several reasons. See appendix IV for more information.  

[29] See OPM, Workforce Planning Model.  

[30] GAO, Human Capital Management: Effectively Implementing Reforms 
and Closing Critical Skill Gaps Are Key to Addressing Federal 
Workforce Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-12-1023T] (Washington, D.C.: Sept. 19, 
2012).  

[31] GAO, Human Capital: Key Principles for Effective Workforce 
Planning, [hyperlink, http://www.gao.gov/products/GAO-04-39] 
(Washington, D.C.: Dec. 11, 2003). 

[32] See OPM, Workforce Planning Model.  

[33] We first recommended that SEC develop such a plan in 2001. See 
[hyperlink, http://www.gao.gov/products/GAO-01-947]. 

[34] See Boston Consulting Group, Organizational Study and Reform.  

[35] As of May 2013, OHR officials told us that, in addition to 
acquiring a workforce and a succession planner, they also revised the 
responsibilities of an existing staff member to support workforce and 
succession planning efforts. 

[36] SEC University is part of OHR and consists of three colleges. The 
Leadership Development College focuses on leadership and offers 
classes to all SEC employees. SEC University collaborates with the 
divisions and offices to conduct training needs assessments and 
develop training plans to address the identified needs.  

[37] The 360 assessment tool supports leadership effectiveness by 
targeting areas for continued development. Through feedback from 
superiors, peers, and subordinates, the tool generates a comprehensive 
evaluation of leadership effectiveness across 24 competencies, 
including managing conflict, leveraging differences, decisiveness, and 
strategic planning. "Iconnect," implemented in late 2011, is SEC's 
mentoring program that offers professional networking and career 
development opportunities to nonsupervisory staff.  

[38] OPM Succession Planning Rule, 5 C.F.R. § 412.201 (2012). 

[39] Human Resources Management in Agencies, HCAAF and HCAAF Systems, 
Standards, and Metrics, 73 Fed. Reg. 23012, 23027 (Apr. 28, 2008) 
(codified at 5 C.F.R. § 250.202 (2012)). 

[40] [hyperlink, http://www.gao.gov/products/GAO-08-34]. 

[41] In addition to HCAAF, see OPM, A Handbook for Measuring Employee 
Performance, (Washington, D.C.: September 2011). For a list of 
internal safeguards key to successful implementation of performance 
management systems that we have previously identified, see GAO, Human 
Capital: DOD Needs to Improve Implementation of and Address Employee 
Concerns about its National Security Personnel System, [hyperlink, 
http://www.gao.gov/products/GAO-08-773] (Washington, D.C.: Sept. 10, 
2008). 

[42] In March 2011, SEC and the SEC employees' union agreed to have an 
independent, third party conduct a study of the application of the 
performance management system for fiscal year 2011, which was 
completed in 2012. See, Robert Tobias, Evaluation of the U.S. 
Securities and Exchange Commission's Evidence Based Performance 
Management System (Washington, D.C.: June 1, 2012). The Tobias study 
included a survey made available to all SEC employees and advertised 
in the SEC Today newsletter. The survey received 1,387 responses (77 
percent bargaining unit; 11 percent nonbargaining unit/nonsupervisory; 
and 13 percent management/supervisory). This equated to a response 
rate of approximately 39 percent. 

[43] SEC has a separate awards program, albeit limited due to budget 
constraints, for strong performance. The program is designed to 
motivate employees and recognize contributions above and beyond normal 
job requirements, and includes monetary and nonmonetary awards. SEC's 
Office of Human Resources (OHR) is responsible for monitoring and 
evaluating documentation for award recommendations, and the use of 
approval authority for awards that OHR delegated to divisions. 

[44] According to results from OPM's 2012 Federal Employee Viewpoint 
Survey, which surveyed employees from 82 federal agencies (comprising 
97 percent of executive branch agencies), about 61 percent of 
employees responding to the survey agreed (or strongly agreed) that 
their supervisors or team leaders provided constructive suggestions to 
improve their job performance, about 21 percent neither agreed nor 
disagreed, and about 19 percent disagreed (or strongly disagreed). 
Percentages do not add up to 100 due to rounding. 

[45] Tobias, Evaluation of the U.S. Securities and Exchange 
Commission's Evidence Based Performance Management System. 

[46] During the same period, SEC took one adverse action (which is 
separate from the improvement plan process and can include unpaid 
suspension, demotion, or removal) against an employee for poor 
performance. The adverse action resulted in the resignation of the 
employee in lieu of termination. Regarding actions taken against poor 
performing employees, we do not have similar information for other 
federal agencies so we could not determine how SEC's removal rates 
compare to those of other federal agencies.  

[47] [hyperlink, http://www.gao.gov/products/GAO-08-773].  

[48] We reviewed program areas among select federal agencies that have 
demonstrated a sustained effort to collaborate within and among 
agencies and identified key principles that they consistently applied, 
such as, frequent communication to facilitate working across agency 
and office boundaries. GAO, Results-Oriented Government: Practices 
That Can Help Enhance and Sustain Collaboration among Federal 
Agencies, [hyperlink, http://www.gao.gov/products/GAO-06-15] 
(Washington, D.C.: Oct. 21, 2005); and Managing For Results: Key 
Considerations for Implementing Interagency Collaborative Mechanisms, 
[hyperlink, http://www.gao.gov/products/GAO-12-1022] (Washington, 
D.C.: Sept. 27, 2012). 

[49] Our survey results are generally consistent with OPM's 2012 
Federal Employee Viewpoint Survey of federal agencies, in which 
slightly more than half of employees government-wide responding to the 
survey agreed (or strongly agreed) that managers supported 
collaboration and communication across units. 

[50] Two hundred and fifty-eight of 2,439 SEC staff responded to our 
open-ended questions in the section on communication. Of those who 
provided written comments, the top three response categories were 
communication between divisions/offices (39.5 percent), communication 
within divisions/offices (21.7 percent), and communication that is 
hierarchical (top to bottom) or not free flowing (13.2 percent).  

[51] Capital Assessment and Accountability Framework (HCAAF) and HCAAF 
Systems, Standards, and Metrics, 73 Fed. Reg. 23012, 23029 (Apr. 28, 
2008) (codified at 5 C.F.R. § 250.202 (2012)). 

[52] Human Resources Management in Agencies, HCAAF and HCAAF Systems, 
Standards, and Metrics, 73 Fed. Reg. 23012, 23027 (Apr. 28, 2008) 
(codified at 5 C.F.R. § 250.202 (2012)); GAO, Organizational 
Transformation: Implementing Chief Operating Officer/Chief Management 
Officer Positions in Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-08-34] (Washington, D.C.: Nov. 1, 
2007); Human Capital: Key Principles for Effective Workforce Planning, 
[hyperlink, http://www.gao.gov/products/GAO-04-39] (Washington, D.C.: 
Dec. 11, 2003); Results-Oriented Cultures: Modern Performance 
Management Systems Are Needed to Effectively Support Pay for 
Performance, [hyperlink, http://www.gao.gov/products/GAO-03-612T] 
(Washington, D.C.: Apr. 1, 2003); Human Capital: DOD Needs to Improve 
Implementation of and Address Employee Concerns about its National 
Security Personnel System, [hyperlink, 
http://www.gao.gov/products/GAO-08-773] (Washington, D.C.: Sept. 10, 
2008); Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005); Managing Key Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012); and Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: Nov. 1, 1999). 

[53] The results of the in-depth interviews may not be generalized to 
all SEC employees because they represent only the experiences of those 
taking part in the interviews.  

[54] For the purpose of our report, we categorized nonsupervisory and 
supervisory staff by placement under SEC's pay plan. Nonsupervisory 
staff were in pay grades SK 12-16 for the Division of Enforcement, and 
SK 12, 13, 14, and 16 for the remaining divisions. Supervisory staff 
were in pay grade SK 17 for the Division of Enforcement, and SK 15 and 
17 for the other divisions. Senior officers were in pay grades SO1-3. 
These categories were current as of July 2012.  

[55] Pub. L. No. 111-203, § 962, 124 Stat. 1376, 1908-09 (2010). 
Section 962 of the Dodd-Frank Act mandated GAO to evaluate: (A) the 
effectiveness of supervisors in using the skills, talents, and 
motivation of the employees of the Commission to achieve the goals of 
the Commission; (B) the criteria for promoting employees of the 
Commission to supervisory positions; (C) the fairness of the 
application of the promotion criteria to the decisions of the 
Commission; (D) the competence of the professional staff of the 
Commission; (E) the efficiency of communication between the units of 
the Commission regarding the work of the Commission (including 
communication between divisions and between subunits of a division) 
and the efforts by the Commission to promote such communication; (F) 
the turnover within subunits of the Commission, including the 
consideration of supervisors whose subordinates have an unusually high 
rate of turnover; (G) whether there are excessive numbers of low-
level, mid-level, or senior-level managers; (H) any initiatives of the 
Commission that increase the competence of the staff of the 
Commission; and (I) the actions taken by the Commission regarding 
employees of the Commission who have failed to perform their duties 
and circumstances under which the Commission has issued to employees a 
notice of termination. § 962(b)(1)(A)-(I).  

[56] We invited and confirmed 8 to 10 staff for each focus group, but 
did not record attendance or names in order to ensure confidentiality. 

[57] Methodologically, focus groups are not designed to demonstrate 
the extent of a problem or to generalize results to a larger 
population. Instead, they are intended to generate in-depth 
information about the reasons for the participants' attitudes on 
specific topics and offer insights into their concerns about or 
support for an issue. 

[58] Of the 22 sessions, 11 consisted of only nonsupervisory staff and 
11 of only supervisory staff. Within both these groups, we held single 
sessions in each of the five locations with staff from Enforcement and 
OCIE, which operate both in headquarters and the regional offices. We 
held one supervisory and one nonsupervisory session with staff from 
Corporation Finance at headquarters.  

[59] Our survey population consisted of employees who were employed at 
SEC as of September 30, 2012. From this list, we selected all 
nonsupervisors and supervisors in the six divisions who were mission-
critical employees--accountants, attorneys, examiners, and financial 
analysts--and the senior officers in those divisions.  

[60] OPM's Federal Employee Viewpoint Survey is a tool that measures 
employees' perceptions of whether, and to what extent, conditions 
characterizing successful organizations are present in their agencies. 
Survey results provide valuable insight into the challenges agency 
leaders face in ensuring the government has an effective civilian 
workforce and how well they are responding. The 2012 Federal Employee 
Viewpoint Survey included employees from 82 agencies (constituting 97 
percent of executive branch agencies).  

[61] Our survey population consisted of employees who were employed at 
SEC as of the end of fiscal year 2012. From this list, we selected all 
nonsupervisors and supervisors in the six divisions who were mission-
critical employees--accountants, attorneys, examiners, and financial 
analysts--and the senior officers in those divisions. The six 
divisions were Corporation Finance, Enforcement, Investment 
Management, Trading and Markets, Economics and Risk Analysis, and the 
Office of Compliance Inspections and Examinations (OCIE). 

[62] The Division of Risk, Strategy, and Financial Innovation changed 
its name to the Division of Economic and Risk Analysis in June 2013, 
after our survey was conducted. We will present the survey results 
consistent with how the information was presented to survey 
respondents.  

[63] Pub. L. No. 111-203, § 962(b)(1)(F), 124 Stat. 1376, 1909 (2010). 

[End of section]  

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